Gold price soars to all-time high as traders await Fed’s September rate cut

• Gold price hits an all-time high of $2,465 on growing expectations of a Fed rate cut in September.
• Trump’s potential election win fuels market volatility, driving investors to non-yielding assets.
• Lower-than-expected inflation data and Powell’s dovish comments underpins Gold.

Gold price skyrockets to a new all-time high of $2,465 on Tuesday amid growing bets that the US Federal Reserve (Fed) will begin its easing cycle in September. This, along with increasing chances that former President Donald Trump would win November’s election, underpinned the yellow metal. The XAU/USD trades at $2465, gains more than 1.70%.

Last week’s lower-than-expected consumer inflation figures pushed non-yielding metal prices higher amid the Fed’s dovish pivot. The CME FedWatch Tool shows that the odds for a 25-basis point rate cut in September are 100%, with a minuscule part of economists foreseeing a 50 bps of easing.

Besides this, over-the-weekend political developments involving former President Trump sponsored a leg-up on the Golden metal. Trump’s Presidency will aim to increase tariffs and cut taxes, which will most likely increase the US budget deficit and generate inflationary pressures.

Meanwhile, Fed Chair Jerome Powell appeared at the Economic Club of Washington, where he commented that the economy performed well and added that the Fed will lower borrowing costs once it is confident that inflation is moving toward the 2% goal.

Data-wise, the US Census Bureau reported that Retail Sales in June were unchanged, as expected. However, excluding autos, sales rose sharply, exceeding forecasts.

Daily digest market movers: Gold climbs as traders ignore mixed US data

• Weaker-than-expected US Consumer Price Index (CPI) data sponsored Gold’s leg-up above $2,400, as the odds for Fed rate cuts increased, as reflected by falling US Treasury bond yields.
• US Retail Sales in June were flat at 0% MoM, as expected. Core sales expanded by 0.4% MoM, above the projected 0.1%.
• June Export and Import Prices both decreased, with Export prices dropping -0.5% MoM, below the forecast of -0.1%. Import prices rose compared to May’s -0.2% decline, coming in at 0%, beneath the estimated 0.2% increase.
• Meanwhile, the US Dollar Index (DXY), which tracks the Greenback against a basket of six currencies, is up by a minimal 0.02% at 104.27.
• December 2024 fed funds rate futures contract implies that the Fed will ease policy by 53 basis points (bps) toward the end of the year, up from 50 last Friday.
• Bullion prices retreated slightly due to the People's Bank of China (PBoC) decision to halt gold purchases in June, as it did in May. By the end of June, China held 72.80 million troy ounces of the precious metal.

Gold technical analysis: XAU/USD surged and extended rally as traders eye $2,500

Gold prices remain bullish and trading at all-time highs, clearing the May 20 high of $2450, which opened the door for further gains. Momentum is still in the bulls' favor, as depicted by the Relative Strength Index (RSI), which aims higher and is shy of reaching “regular” overbought conditions.

XAU/USD's next resistance would be $2,475, followed by the $2,500 figure. Conversely, if gold prices slide below $2,450, the first resistance would be the $2,400 figure, followed by the July 5 high at $2,392. If cleared, XAU/USD would continue to $2,350.