Gold Analysis: The Trend Permits Further Gains – 15 July 2024

-- Gold prices are holding near record levels with growing optimism about interest rate cuts from the U.S. Federal Reserve.
-- As trading begins this week, gold prices are stable around the resistance level of $2418 per ounce, close to last week's gains which reached the resistance level of $2424 per ounce.
-- Recently, a wave of U.S. economic data, including the core Consumer Price Index, has indicated that inflation in the United States is easing.
-- This could give Federal Reserve Chairman Jerome Powell and his colleagues the confidence they need to cut U.S. interest rates. ;

Activity in the federal funds futures market suggests that bond traders are intensifying their bets that the Federal Reserve will cut U.S. interest rates by half a percentage point in September instead of the expected quarter-point increase. Moreover, the Lower rates tend to favor interest-free gold. According to gold trading platforms, the spot price of gold rose on Friday toward its record high of $2450.07 per ounce, which it reached in May, reversing earlier declines after the U.S. Bureau of Labor Statistics released producer price index data. ;

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Overall, gold has risen 17% this year despite headwinds including rising interest rates and flat inflation, partly due to strong buying by central banks, investor demand and the metal’s appeal as a haven asset amid rising political risk. ;

Gold has surprised many observers this year by reaching record levels despite high interest rates and persistent inflation, which have driven expectations about the Federal Reserve's pivot. Prices have been supported by strong purchases from global central banks, demand from investors seeking a safe haven amid geopolitical tensions and buying by Chinese consumers. ;

Thursday’s figures suggest that U.S. inflation is now easing again after surging at the start of the year, while broader economic activity appears to be slowing. On Wednesday, Federal Reserve Chairman Jerome Powell concluded his second day of testimony in Washington, where he said that the US central bank does not need inflation below 2% before cutting interest rates. Higher interest rates have been a headwind for gold as a non-interest-bearing asset. ;

Commenting on the impact on gold, Ryan McKay, Senior Commodity Markets Analyst at TD Securities, said in a note, "Lower-than-expected inflation data exacerbates the rise in precious metals." Added, "It is increasingly likely that the main macroeconomic group that has been on the sidelines so far will regain interest in gold." ;

Gold Price Forecast and Analysis Today: ;

After a failed assassination attempt on Trump, global tensions have increased interest in buying gold as a safe haven. We have often recommended buying gold from every downside level through my live trading recommendations page. Clearly, holding above the psychological resistance of $2,400 per ounce will continue to crown the bulls’ control over the general trend, while at the same time, technical indicators will move towards strong overbought levels. Currently, the closest resistance levels for gold are $2422, $2435 and $2455 per ounce respectively. On the other hand, the closest support levels for gold are currently $2388 and $2370 per ounce. The gold price will continue to monitor the U.S. dollar's level and investors' risk appetite, along with the future policies of global central banks. ;

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Original Source DailyForex.com provides daily fundamental and technical analysis and signals for those looking to trade based on trends in the currency markets.