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Jul 15
2024

Gold price clings to gains near $2,400 on firm Fed rate-cut bets

Gold price holds gains to near $2,400, driven by growing speculation for Fed rate cuts in September. Softer-than-expected US inflation for June indicated that price pressures are on course to return to 2%.

Technical Overview

Gold price trades in a tight range, slightly above $2,400. The precious metal seeks more cues about when the Fed will start reducing interest rates. The yellow metal exhibits a consolidation move for the last three months, ranging between $2,277-2,450.

The upward-sloping 20-day Exponential Moving Average (EMA) near $2,363 suggests that the overall trend is bullish.

The 14-day Relative Strength Index (RSI) rises above 60.00 for the first time in more than a month, suggesting more upside ahead due to the absence of signals such as oversold and divergence.

 
 

Fundamental Overview

Gold price (XAU/USD) rebounds to near $2,400 in Monday’s European session after a modest correction from seven-week high of $2,424 on Thursday. The precious metal edged lower as the US Dollar gained ground after an assassination attack on former United States (US) President Donald Trump improved the US Dollar’s appeal.

The sniper attack on Trump has increased his odds of winning the US Presidential elections later this year. This has led to investors pouring funds into the US Dollar, as Donald Trump is known for favoring protective trade policies, which is a favorable scenario for the Greenback. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, gains firm footing near 104.00. 

The higher US Dollar makes the Gold price an expensive bet for investors. However, the near-term outlook of the US Dollar remains weak as the Federal Reserve (Fed) is widely anticipated to begin reducing interest rates from the September meeting. 

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