GOLD regains traction on geopolitical risks, ahead of US inflation test
Gold returns to green early Wednesday, looking to retest record highs amid intensifying geopolitical tensions.
US Dollar stalls its recovery from the Nonfarm Payrolls Benchmark Revision-led blow.
Bets for aggressive Fed rate cuts are on the table ahead of US PPI inflation data.
Gold attempts a fresh leg north despite the daily RSI still heavily overbought.
Gold is finding fresh haven demand early Wednesday as geopolitical tensions hog the limelight, while the USD recovery fizzles out ahead of US PPI inflation data release.
Having witnessed volatile trading on Tuesday, Gold is primed for another such day this Wednesday as fresh geopolitical headlines hit the wires and revive Gold’s appeal as a traditional store of value.
A bout of fresh USD selling on traders’ repositioning ahead of US PPI data also aids the upswing in Gold.
Looking ahead, only an upside surprise in the US PPI inflation data could negate the near-term bearishness in the USD and check Gold’s record run.
In the meantime, increased bets for aggressive interest rate cuts by the US Fed this month could continue to power the non-yielding Gold at the expense of the Greenback.
Markets are pricing in an 84% chance of a 25 bps rate cut at the Fed’s September meeting and a 6% probability of a jumbo 50 bps rate cut, according to the CME Group’s FedWatch tool.Further, speculations are rife that the Fed could deliver more than two rate cuts this year.
On Tuesday, Gold rallied hard and refreshed record highs at $3,675 after the highly anticipated NFP Benchmark Revision report showed downward revisions of nearly a million fewer jobs to previous government estimates for the April 2024 to March 2025 period, per Reuters.
The downward revisions amplified US labor market concerns, calling for big Fed rate cut next week.
Gold also received another booster shot from Israeli attacks on Hamas leadership in Doha, Qatar’s capital.
However, Gold failed to sustain at higher levels as profit-taking seeped in amid the USD resurgence on a global flight to safety.
Daily technical analysis
The daily chart shows that Gold could see another pullback from higher levels as the 14-day RSI remains in a heavily overbought zone. The leading indicator is currently near 78.
If Gold buyers lose their ground, the immediate support is seen at the $3,600 round number, below which this week’s low of $3,578 could be tested.
A sustained break below the latter will open up a fresh downside toward the $3,550 psychological mark.
However, if buyers refuse to give up, the record high of $3,675 will be retested.
The next topside barrier is seen at the $3,700 level, above which the $3,750 region could offer some resistance.
GOLD regains traction on geopolitical risks, ahead of US inflation test
Gold is finding fresh haven demand early Wednesday as geopolitical tensions hog the limelight, while the USD recovery fizzles out ahead of US PPI inflation data release.
Having witnessed volatile trading on Tuesday, Gold is primed for another such day this Wednesday as fresh geopolitical headlines hit the wires and revive Gold’s appeal as a traditional store of value.
A bout of fresh USD selling on traders’ repositioning ahead of US PPI data also aids the upswing in Gold.
Looking ahead, only an upside surprise in the US PPI inflation data could negate the near-term bearishness in the USD and check Gold’s record run.
In the meantime, increased bets for aggressive interest rate cuts by the US Fed this month could continue to power the non-yielding Gold at the expense of the Greenback.
Markets are pricing in an 84% chance of a 25 bps rate cut at the Fed’s September meeting and a 6% probability of a jumbo 50 bps rate cut, according to the CME Group’s FedWatch tool.Further, speculations are rife that the Fed could deliver more than two rate cuts this year.
On Tuesday, Gold rallied hard and refreshed record highs at $3,675 after the highly anticipated NFP Benchmark Revision report showed downward revisions of nearly a million fewer jobs to previous government estimates for the April 2024 to March 2025 period, per Reuters.
The downward revisions amplified US labor market concerns, calling for big Fed rate cut next week.
Gold also received another booster shot from Israeli attacks on Hamas leadership in Doha, Qatar’s capital.
However, Gold failed to sustain at higher levels as profit-taking seeped in amid the USD resurgence on a global flight to safety.
Daily technical analysis
The daily chart shows that Gold could see another pullback from higher levels as the 14-day RSI remains in a heavily overbought zone. The leading indicator is currently near 78.
If Gold buyers lose their ground, the immediate support is seen at the $3,600 round number, below which this week’s low of $3,578 could be tested.
A sustained break below the latter will open up a fresh downside toward the $3,550 psychological mark.
However, if buyers refuse to give up, the record high of $3,675 will be retested.
The next topside barrier is seen at the $3,700 level, above which the $3,750 region could offer some resistance.
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