Gold clocks $3,423 as cautious markets await PCE data
- Dollar Index slips below 98.
- Gold extends bullish rebound reaching $3423.
- Markets prefer caution ahead of PCE data.
- Global macro economics remains full of uncertainty on Tariff, Geo-political woes and Fed's independence.
What is happening in Gold?
Gold continues to remain a favourite buy on dips as buyers keep stepping in on pullback and the rally continues reaching higher highs.
The sideways consolidation and casual retracement found strong buying interest around $3385 and a clear rebound boosted prices to $3423.
Some retracement towards support base is witnessing volatility ranging between $3406-$3415.
Fundamental drivers
As the month end approaches, increasing odds of a rate cut in September Fed's meeting weakens Dollar which witnessed the Dollar Index slipping below 98.
Upcoming PCE inflation data release makes markets cautious and any rhetorical statements by Fed will impact the macro sentiments adding strong tailwinds for Gold which remains a preferred safe haven asset during uncertainties as Dollar shows signs of losing investors confidence.
Technical drivers
Considering the broad macro drivers favouring Gold bullish momentum, any price dip is witnessing strong rebound and recent local demand surge from $3385 zone has triggered a massive uplift taking the rally to $3423.
Bullish momentum remains intact as long as the metal maintains stability above $3400 and a tad lower $3392 support.
Only if $3392-$3387 support base is invalidated, a further downside correction may be witnessed exposing $3375--$3362-$3352.
If Gold consolidates above $3415 and makes a strong break above $3425, next upside may come for $3435-$3445 while next major resistance sits at $3465-$3468.
Author
Sunil Kumar Dixit
SK Charting
Sunil Kumar Dixit is Chief Technical Strategist and founder of SK Charting, a research firm based in India. He tracks Precious Metals, Energy, Indices and Currency Pairs. He also participates as an expert panellist on Channel Television, Nigeria.
