XAUUSD H6 Idea
Gold Market—Fed Rate Cut Hopes and Middle East Tensions
- Last week, gold prices edged higher, closing at $2,660, up just 0.13%. The ongoing conflict, particularly Israeli airstrikes on Hezbollah, boosted safe-haven demand for gold, though the strength of the U.S. dollar limited significant gains.
- Early in the week, strong nonfarm payroll data sparked concerns that the Fed might hold off on cutting interest rates, causing a dip in gold prices. However, inflation data released later in the week, which showed the slowest annual rise in over three years, shifted sentiment back towards expectations of a Fed rate cut in November. This helped gold recover as lower interest rates generally support non-yielding assets like gold.
- Despite the dollar remaining strong and U.S. Treasury yields staying elevated, inflation data softening by week’s end offered some relief for gold. By Friday, a stronger case for monetary easing, bolstered by the Producer Price Index (PPI) report, pushed gold prices higher.
- Looking ahead, gold is expected to trade within a narrow range, with key support around $2,604.39 and resistance near $2,685.64. Geopolitical tensions, especially in the Middle East, will continue to support safe-haven demand, but much will depend on upcoming U.S. economic data and any further escalation in the conflict. If the Federal Reserve confirms a rate cut at its November meeting, it could push gold prices higher, as lower interest rates typically benefit non-yielding assets like gold. However, the strength of the U.S. dollar and persistent inflation concerns may limit significant upward movement.
- Last week, gold prices edged higher, closing at $2,660, up just 0.13%. The ongoing conflict, particularly Israeli airstrikes on Hezbollah, boosted safe-haven demand for gold, though the strength of the U.S. dollar limited significant gains.
- Early in the week, strong nonfarm payroll data sparked concerns that the Fed might hold off on cutting interest rates, causing a dip in gold prices. However, inflation data released later in the week, which showed the slowest annual rise in over three years, shifted sentiment back towards expectations of a Fed rate cut in November. This helped gold recover as lower interest rates generally support non-yielding assets like gold.
- Despite the dollar remaining strong and U.S. Treasury yields staying elevated, inflation data softening by week’s end offered some relief for gold. By Friday, a stronger case for monetary easing, bolstered by the Producer Price Index (PPI) report, pushed gold prices higher.
- Looking ahead, gold is expected to trade within a narrow range, with key support around $2,604.39 and resistance near $2,685.64. Geopolitical tensions, especially in the Middle East, will continue to support safe-haven demand, but much will depend on upcoming U.S. economic data and any further escalation in the conflict. If the Federal Reserve confirms a rate cut at its November meeting, it could push gold prices higher, as lower interest rates typically benefit non-yielding assets like gold. However, the strength of the U.S. dollar and persistent inflation concerns may limit significant upward movement.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.