Gold price is sitting at fresh weekly highs near the $3,380 neighborhood, building on the previous upswing early Thursday. Gold buyers closely eye the Middle East geopolitical tensions and the US PPI data for a fresh leg north.
Amid escalating geopolitical tensions in the Middle East, markets are slightly risk averse and prefer to flock to the traditional safe-haven Gold price.This comes as US President Trump’s Middle East envoy Steve Witkoff is still planning to meet with Iran for a sixth round of talks on the country’s nuclear program on Sunday.
Bolstering the Gold price advance, the USD extends the softer US inflation data-led decline and flirts with two-month lows against its major currency rivals.
The US CPI increased 0.1% for the month, putting the annual inflation rate at 2.4%. Both prints undermined expectations of 0.2% and 2.5% respectively. Core figures also came in below estimates across the time horizons.
Tame US CPI data ramped up odds for a US Fed interest rate cut in September, with markets now pricing in about a 62% probability of 25 basis points (bps) rate cut, per CME Group’s FedWatch tool, up from 52% seen pre-data release.
The latest downtick in the US Dollar is sponsored by the looming uncertainty surrounding Trump’s tariffs even as US-China trade tensions ease.Trump said on Wednesday he would be willing to extend a July 8 deadline for completing trade talks with countries before higher US tariffs are imposed.The USD will likely remain defensive as markets try to make sense of the latest trade developments and its impact on the economic outlook.
However, hot US PPI inflation data could offer some respite to USD buyers, limiting the Gold price upside.
The US PPI is forecast to rise at an annual rate of 2.6% in May, following a 2.4% increase in April. The monthly PPI inflation is set to rebound to 0.2% in the same period. Core PPI is expected to rise 3.1% over the year and 0.3% on a monthly basis last month.
Also, of note will remain the simmering Israel-Iran geopolitical conflict and trade headlines, which could have a significant impact on the USD and hence, the bright metal.
Finally, it’s worth mentioning that record purchases by global central banks and rising prices have strengthened Gold’s position as the second biggest reserve holding in value terms, first being the USD, a report published by the European Central Bank (ECB) showed on Wednesday.
Daily technical analysis
The bullish outlook for Gold price in the short term has been solidified as buyers staged a solid reversal from the critical $3,297 level. That level is the 38.2% Fibo level of the April record rally.
The 14-day RSI points north above the midline, currently near 57.50, justifying the renewed upside.
For a sustained uptrend, Gold price must find a foothold above the 23.6% Fibo resistance at $3,377 on a daily closing basis.The next stiff resistance is spotted at the $3,400 mark, above which the May high of $3,439 will come into the picture.
On the downside, the immediate support is aligned at the 21-day SMA of $3,315.
Gold sellers need a decisive break below the abovementioned strong support at $3,297 to challenge the 50-day SMA cushion at $3,279.The last line of defense for buyers is aligned at $3,232, the 50% Fibo level of the same ascent.
GOLD looks to $3,400 as Middle East tensions, US PPI grab attention
Gold price is sitting at fresh weekly highs near the $3,380 neighborhood, building on the previous upswing early Thursday. Gold buyers closely eye the Middle East geopolitical tensions and the US PPI data for a fresh leg north.
Amid escalating geopolitical tensions in the Middle East, markets are slightly risk averse and prefer to flock to the traditional safe-haven Gold price.This comes as US President Trump’s Middle East envoy Steve Witkoff is still planning to meet with Iran for a sixth round of talks on the country’s nuclear program on Sunday.
Bolstering the Gold price advance, the USD extends the softer US inflation data-led decline and flirts with two-month lows against its major currency rivals.
The US CPI increased 0.1% for the month, putting the annual inflation rate at 2.4%. Both prints undermined expectations of 0.2% and 2.5% respectively. Core figures also came in below estimates across the time horizons.
Tame US CPI data ramped up odds for a US Fed interest rate cut in September, with markets now pricing in about a 62% probability of 25 basis points (bps) rate cut, per CME Group’s FedWatch tool, up from 52% seen pre-data release.
The latest downtick in the US Dollar is sponsored by the looming uncertainty surrounding Trump’s tariffs even as US-China trade tensions ease.Trump said on Wednesday he would be willing to extend a July 8 deadline for completing trade talks with countries before higher US tariffs are imposed.The USD will likely remain defensive as markets try to make sense of the latest trade developments and its impact on the economic outlook.
However, hot US PPI inflation data could offer some respite to USD buyers, limiting the Gold price upside.
The US PPI is forecast to rise at an annual rate of 2.6% in May, following a 2.4% increase in April. The monthly PPI inflation is set to rebound to 0.2% in the same period. Core PPI is expected to rise 3.1% over the year and 0.3% on a monthly basis last month.
Also, of note will remain the simmering Israel-Iran geopolitical conflict and trade headlines, which could have a significant impact on the USD and hence, the bright metal.
Finally, it’s worth mentioning that record purchases by global central banks and rising prices have strengthened Gold’s position as the second biggest reserve holding in value terms, first being the USD, a report published by the European Central Bank (ECB) showed on Wednesday.
Daily technical analysis
The bullish outlook for Gold price in the short term has been solidified as buyers staged a solid reversal from the critical $3,297 level. That level is the 38.2% Fibo level of the April record rally.
The 14-day RSI points north above the midline, currently near 57.50, justifying the renewed upside.
For a sustained uptrend, Gold price must find a foothold above the 23.6% Fibo resistance at $3,377 on a daily closing basis.The next stiff resistance is spotted at the $3,400 mark, above which the May high of $3,439 will come into the picture.
On the downside, the immediate support is aligned at the 21-day SMA of $3,315.
Gold sellers need a decisive break below the abovementioned strong support at $3,297 to challenge the 50-day SMA cushion at $3,279.The last line of defense for buyers is aligned at $3,232, the 50% Fibo level of the same ascent.
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