Gold price has been struggling to find a firm intraday direction on Monday due to a mix of conflicting factors. While a positive risk tone is capping gains, geopolitical risks and bets for a Federal Reserve rate cut are providing some support. Traders are also hesitant ahead of the release of key US inflation figures later this week. The ongoing conflicts in the Middle East are adding to market uncertainties, which could further support the safe-haven appeal of gold.
Market participants are closely monitoring the latest developments from the Middle East, with the Israel Defense Forces intercepting projectiles from Lebanon and tensions escalating in the region. The US has also strengthened its military presence in the Middle East, raising concerns about a broader conflict. These geopolitical uncertainties, combined with expectations for a dovish Fed, are contributing to the support for the Gold price. Traders have already priced in a 25-basis points rate cut at the upcoming Fed policy meeting, with the possibility of a larger 50-bps cut.
Fed Governor Michelle Bowman’s comments about the potential for no rate cut in September due to upside risks for inflation and a strong labor market have failed to provide any meaningful support for the US Dollar or Gold price. Bullish traders are waiting for the release of US inflation figures, including the Producer Price Index and Consumer Price Index, to determine the Fed’s future policy decisions and provide direction for the Gold price. Technical indicators suggest that Gold price may appreciate further, with support at the 50-day SMA and resistance near the $2,448-2,450 region.
Overall, the Gold price is facing mixed signals as traders navigate through geopolitical uncertainties and Federal Reserve expectations. The upcoming US inflation figures will be closely watched for clues about the Fed’s policy path and could provide a fresh impetus for the Gold price. Despite challenges from a positive risk tone and a potential lack of rate cuts from the Fed, Gold price continues to hold steady with support from geopolitical risks and trader reluctance. Investors are advised to closely monitor market developments and key economic data releases to make informed decisions in the gold market.
