GOLD Price Dips as Confidence Grows in September Rate Hike
The price of gold (XAU/USD) faced a bearish turn during Friday's European session as the US Dollar strengthened further, supported by the resilience of the United States economy. The precious metal is under pressure due to the remarkable performance of the US economy in the second quarter, strong demand for durable goods, and the tight labor market. As fears of additional policy-tightening by the Federal Reserve (Fed) resurface, the downside for gold prices remains a possibility.
The surprising strength of the US economy, as evident from higher-than-expected Gross Domestic Product (GDP) data, has dispelled concerns of an imminent recession. Additionally, Fed Chair Jerome Powell's recent commentary stated that Fed officials do not foresee a recession amid the tight labor market conditions. The focus now shifts to the upcoming release of the Fed's preferred inflation gauge and the Employment Cost Index data, which could spur further movement in the US Dollar.
As the Greenback continues to assert its footing, gold prices are feeling the pressure, and the possibility of further rate hikes in September is solidifying. Investors are closely monitoring economic data and Fed statements for any signs that could impact the precious metal's performance in the coming days.
TurnAround Point: 1959.00
Our preference
Short positions below 1959.00 with targets at 1942.00 & 1938.00 in extension.
The surprising strength of the US economy, as evident from higher-than-expected Gross Domestic Product (GDP) data, has dispelled concerns of an imminent recession. Additionally, Fed Chair Jerome Powell's recent commentary stated that Fed officials do not foresee a recession amid the tight labor market conditions. The focus now shifts to the upcoming release of the Fed's preferred inflation gauge and the Employment Cost Index data, which could spur further movement in the US Dollar.
As the Greenback continues to assert its footing, gold prices are feeling the pressure, and the possibility of further rate hikes in September is solidifying. Investors are closely monitoring economic data and Fed statements for any signs that could impact the precious metal's performance in the coming days.
TurnAround Point: 1959.00
Our preference
Short positions below 1959.00 with targets at 1942.00 & 1938.00 in extension.
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