Новини ринків
08.08.2024, 07:41

Gold price steadies on firm Fed rate-cut prospects

  • Gold’s price hovers near $2,400 as the US Dollar and bond yields correct.
  • The Fed is expected to cut interest rates by more than 100 bps this year.
  • Investors await the US weekly jobless claims data.

Gold’s price (XAU/USD) slightly recovers from a two-day low of $2,380 in Thursday’s European session. The precious metal continues to hold ground due to expectations that the Federal Reserve (Fed) will start reducing interest rates from the September meeting.

Meanwhile, some corrections in the US Dollar (USD) and bond yields have offered a cushion to Gold’s price. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, drops to near 103.00 from a three-day high of 103.37. Meanwhile, 10-year US Treasury yields tumble to near 3.90%. Historically, lower yields on interest-bearing assets bode well for non-yielding assets, such as Gold, by reducing the opportunity cost of investment in them.

According to the CME FedWatch tool, 30-day Federal Funds futures pricing data shows that traders see a 50-basis point (bp) cut in interest rates in September as imminent. The data also suggests that the Fed will reduce its key borrowing rates by more than 100 bps this year. Market speculation for the Fed approaching an aggressive policy stance was prompted by softening labor market conditions, signaled by slower job growth and a rising Unemployment Rate in July.

Daily digest market movers: Gold price capitalizes on multiple tailwinds

  • Gold price remains steady on multiple tailwinds. Growing expectations for Fed rate-cut prospects and escalating Middle East tensions have kept the Gold price’s downside limited. The prospects for Fed’s bulk rate cuts were bolstered by potential economic slowdown as investors worry that the United States (US) struggles to bear the consequences of higher interest rates.
  • While traders priced in aggressive rate-cut announcements by the Fed this year, US economic data has not pointed to a significant slowdown. Though the ISM Manufacturing Purchasing Managers’ Index (PMI) contracted at a faster-than-expected pace in July, activities in the service sector, which accounts for two-thirds of the economy, expanded strongly.
  • Commenting on the Services PMI performance, Chris Williamson, chief business economist at S&P Global Market Intelligence, said: “The July surveys are indicative of the economy continuing to grow at the start of the third quarter at a rate comparable to GDP rising at a solid annualized 2.2% pace."
  • On the geopolitical front, escalating conflicts between Iran and Israel kept Gold’s safe-haven appeal intact. Saudi Arabia said the killing of the Hamas leader in Tehran is a 'blatant violation' of Iran's sovereignty, Deccan Herald reported. Meanwhile, Israel vowed to eliminate the new Hamas chief, Yahya Sinwar.
  • In Thursday’s session, investors will focus on the US Initial Jobless Claims data for the week ending August 2, which will be published at 12:30 GMT. The Department of Labor is expected to show that individuals claiming jobless benefits for the first time were 240K, lower than the prior release of 249K.

Technical Analysis: Gold price hovers near $2,400

Gold’s price trades in a channel formation on a daily timeframe, which is slightly rising but broadly exhibited a sideways performance for more than three months. The 50-day Exponential Moving Average (EMA) near $2,370 continues to provide support to the Gold price bulls. 

The 14-day Relative Strength Index (RSI) oscillates within the 40.00-60.00 range, suggesting indecisiveness among market participants.

A fresh upside would appear if the Gold price breaks above its all-time high of $2,483.75, which will send it into unchartered territory.

On the downside, the upward-sloping trendline at $2,225, plotted from the October 6 low near $1,810.50, will be a major support in the longer term.

Gold FAQs

Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.

 

© 2000-2024. Уcі права захищені.

Cайт знаходитьcя під керуванням TeleTrade DJ. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).

Інформація, предcтавлена на cайті, не є підcтавою для прийняття інвеcтиційних рішень і надана виключно для ознайомлення.

Компанія не обcлуговує та не надає cервіc клієнтам, які є резидентами US, Канади, Ірану, Ємену та країн, внеcених до чорного cпиcку FATF.

Політика AML

Cповіщення про ризики

Проведення торгових операцій на фінанcових ринках з маржинальними фінанcовими інcтрументами відкриває широкі можливоcті і дає змогу інвеcторам, готовим піти на ризик, отримувати виcокий прибуток. Але водночаc воно неcе потенційно виcокий рівень ризику отримання збитків. Тому перед початком торгівлі cлід відповідально підійти до вирішення питання щодо вибору інвеcтиційної cтратегії з урахуванням наявних реcурcів.

Політика конфіденційноcті

Викориcтання інформації: при повному або чаcтковому викориcтанні матеріалів cайту поcилання на TeleTrade як джерело інформації є обов'язковим. Викориcтання матеріалів в інтернеті має cупроводжуватиcь гіперпоcиланням на cайт teletrade.org. Автоматичний імпорт матеріалів та інформації із cайту заборонено.

З уcіх питань звертайтеcь за адреcою pr@teletrade.global.

Банківcькі
переклади
Зворотній зв'язок
Online чат E-mail
Вгору
Виберіть вашу країну/мову