Gold: Rebound needs softer Oil and data – OCBC

FXStreet Insights Team FXStreet

OCBC’s Sim Moh Siong and Christopher Wong report that Gold has rebounded from sub-4000 levels after softer United States (US) Consumer Price Index (CPI) prompted markets to pare Fed hike expectations and pushed USD and front-end US Treasury yields lower. They see the move as a reversal of excessive hawkish repricing rather than a macro regime shift, with further upside contingent on easing Oil prices and continued softness in US data.

Soft CPI lifts prices but constraints remain

"Gold rebounded from sub-4000 levels. Softer-than-expected US CPI was the trigger as markets pared back Fed hike expectations while Fed Chair Warsh did not out-hawk earlier rhetoric. USD weakened and front-end US Treasury yields initially moved lower, helping gold recover from a two-week low to an intra-session high of 4102."

"This provides gold with some near-term breathing room, particularly if the USD and yields remain capped. But the move looks more like a reversal of excessive hawkish repricing than a decisive change in the macro backdrop. The June CPI report also predates the latest rise in oil prices, which could keep the inflation outlook and Fed policy expectations volatile."

"Further upside in gold would require oil prices to ease off further and continued softness in US data, with PPI the next test (tonight). "

"Gold last seen at 4051 levels. Mild bullish momentum on daily chart stays intact for now while RSI rose. 2-way trades likely. Resistance at 4113 (21 DMA). Support at 3940/60 levels (recent low in June)."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD revisits 1.3530; Dollar pushes harder

GBP/USD adds to the weekly correction and recedes toward the 1.3530 zone on Friday. Indeed, Cable faces increasing selling pressure on the back of extra gains in the Greenback, particularly fuelled by Chair Warsh’s speech at the Jackson Hole Symposium and the US NFP Annual Revision (-79K).

EUR/USD breaches below 1.1600, multi-day lows

EUR/USD now accelerates its decline and retreats to seven-day troughs in the sub-1.1600 region at the end of the week. The pair’s pullback comes on the back of the strong rebound in the US Dollar after Chair Warsh delivered a hawkish message in Jackson Hole, while the US NFP Annual Revision came in at -79K.

Gold challenges its 200-day SMA near $4,530

Gold’s decline gathers fresh steam, hitting weekly lows while disputing its critical 200-day SMA near $4,530 per troy ounce. The yellow metal’s increasing weakness comes in response to the generalised upbeat tone in the US Dollar and the widespread rebound in US Treasury yields, as investors continue to reprice a Fed rate hike in September.

Crypto Today: Bitcoin, Ethereum, XRP rally loses steam despite steady ETF inflows

Bitcoin is back below $80,000 at the time of writing on Friday, after a second attempt at breaking resistance between $81,000 and $82,000. Meanwhile, Ethereum and Ripple mirror Bitcoin’s cooling trend, with ETH sliding to $2,500 and XRP falling toward $1.40 support.

Week ahead – RBNZ and BoC decide on rates ahead of all-important US NFP

Dollar rebounds ahead of ISM PMI and NFP data. RBNZ is expected to raise rates; focus to fall on forward guidance. BoC is set to remain on hold; will it raise rates in 2027?

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.