The surge in gold prices to $2500/oz has been fueled by a combination of factors, including a stronger US Dollar, rising US Yields, and potential profit-taking ahead of Fed Chair Powell’s address at the Jackson Hole Symposium. Investors are closely monitoring Powell’s speech for any indications of future rate cuts in September.
While many market participants had hoped for confirmation of September rate cuts, the downward revision to US jobs data and statements from Fed policymakers have already priced in the possibility of a rate cut next month. This raises questions about how the market will respond to Powell’s remarks and whether they will have a significant impact on gold prices.
From a technical standpoint, the rebound in gold during the European session indicates bullish momentum for the precious metal. The surge above $2500/oz suggests that investors are optimistic about the future outlook for gold. Despite the recent dip in prices, buyers have quickly returned to the market, supporting the upward momentum.
The market remains uncertain about the impact of Powell’s speech, especially with other Federal Reserve policymakers also scheduled to speak. While volatility is expected in the short term, the general direction of gold prices may not see any significant changes based on Powell’s remarks. Investors will be closely watching for any mention of a potential 50 bps cut in September, which was previously priced in by the market.
Immediate resistance levels for gold in the US session may be found at 2514 and 2531.66, with the weekly high at the latter level. On the downside, support levels are at 2484 and 2472, with a move below potentially leading to a retest of the key support area at 2450. Finding key levels in the current market environment, with gold hitting all-time highs, has been a challenge for investors.
The surge in gold prices to $2500/oz ahead of Powell’s speech indicates a bullish sentiment among investors. While the market has largely priced in the possibility of September rate cuts, the impact of Powell’s remarks remains uncertain. Technical analysis suggests continued bullish momentum for gold, with key resistance and support levels to watch in the coming sessions. Investors should remain cautious and closely monitor developments in the market to make informed decisions.
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