XAU/USD outlook: Gold price rises on revived rate cut expectations, US inflation data in focus

Slobodan Drvenica Windsor Brokers

XAU/USD

Gold price rose on Wednesday, lifted by the latest comments from Fed Chair Powell, which warmed up expectations rate cut, after the central bank postponed the start of policy easing several times.

Powell’s testimony on Tuesday provided fresh hints that the central bank remains on track for rate cut, following recent weak US economic data, though the policymakers remain cautious and still require more evidence to finally give a green light

Market bets for rate cut in September rose to 75%, with growing expectations for another easing in December, though the final decision will be in hands of the US policymakers, with Powell’s second day of testimony today and release of US June CPI report, to provide more clues about the timing of Fed’s action in coming months.

Fresh strength pushed the price to the upper side of longer range, spanned between $2390 and $2290, with psychological $2400 coming in focus.

Daily studies are bullish, but positive momentum is fading, with fundamentals likely to play a key role again.

US annualized inflation is expected to ease to 3.1% in June from3.3% in May, while core inflation, stripped for the most volatile components is expected to remain unchanged at 3.4%.

Gold will benefit if consumer prices diverge from consensus to the downside, as such scenario would move the Fed one step closer to the first rate cut and probably push the price above $2400 pivot.

Conversely, higher than expected Jun CPI numbers would sour metal’s sentiment.

Res: 2392; 2400; 2433; 2450

Sup: 2362; 2351; 2341; 2319

Interested in XAU/USD technicals? Check out the key levels

1. R3 2407.53
2. R2 2397.12
3. R1 2384.19
PP 2373.78
1. S1 2360.85
2. S2 2350.44
3. S3 2337.51

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

AUD/USD edges higher as hot CPI inflation and hawkish RBA lift rate hike bets

The AUD/USD pair gathers strength to near 0.7035 during the Asian trading hours on Friday. The Australian Dollar edges higher against the US Dollar as hotter Australian CPI inflation data has bolstered expectations of Reserve Bank of Australia rate hikes.

USD/JPY meets support near 157.00

USD/JPY retreats for the third consecutive day on Friday, revisiting the 157.00 region before attempting some recovery as investors continue to assess the latest BoJ meeting, where the central bank left rates unchanged, as widely anticipated.

Gold sinks to fresh yearly lows despite risk-off mood as Fed rate hike bets weigh

Gold slips to fresh year-to-date lows on Friday. The metal struggles despite a risk-off mood across markets, as expectations of further Federal Reserve (Fed) interest rate hikes continue to dominate price action, leaving Gold on track to end the month in negative territory.

Ripple Price Forecast: XRP bulls defend $1.20 as sell-side pressure triggers liquidations

Ripple (XRP) trades around $1.25 on Friday, rising from a short-term support level established at $1.20. This minor upward correction follows a sharp sell-off, triggered amid reports of a hack attack on the Binance exchange that impacted approximately $6.3 billion. The attack drove the broader crypto market on edge, as Binance suspended both deposits and withdrawals to contain the situation.

BoJ recap: A pause for now... but Japan has entered a new inflation phase

The Bank of Japan left its short-term policy rate unchanged at 1.25% but delivered a distinctly hawkish message on the risk of an inflation overshoot. The decision passed by 8-1, with board member Takata dissenting in favour of an increase to 1.5%, while Governor Kazuo Ueda stressed that the Bank would continue adjusting policy as needed.

The 2% inflation target came from a throwaway remark. It now moves trillions

The Federal Reserve's 2% inflation goal grew out of an off-the-cuff remark by a New Zealand politician in 1988. Bond investors still price long-term US debt as if 2% holds, so a change in how the Fed measures inflation would move markets.