Gold Price breaks above the top of the high range
Gold Price breaks above the top of the $1700-$1720 range and rallies towards the $1750 area, where the non-yielding metal will face solid resistance, led by the July 8 daily high at $1752.46. At the time of writing, the XAUUSD is trading at $1753.62. Global equities are mixed, though US stocks are trimming some of Wednesday’s gains, courtesy of the Federal Reserve’s slightly “dovish” tilt. Although the US Fed Chair Jerome Powell acknowledged that production and spending were slowing down, he reiterated that the Fed would continue hiking rates, opening the door for another “exceptionally” increase. After that, the US central bank would become data-dependent and could slow the pace of tightening.
Gold price reaction to that climbed from $1718.60 to $1738.28 and finished trading around $1733.10. On Thursday, the XAUUSD is gaining almost $20 and is up 1%. In the meantime, the US Advance GDP for Q2 showed signs that the economy is further deteriorating. The US Department of Commerce revealed that GDP shrank at a 0.9% YoY pace after declining 1.6% in the first quarter, meaning that the US is in a technical recession. The report shows decreases in private inventory investment, residential fixed investment, and federal government spending. The positive is that, albeit contracting, it jumped from Q1’s -1.6% YoY print, helped by increases in exports and personal consumption expenditures (PCE).
At the same time, the US Department of Labor reported that Initial Jobless Claims for the week ending on July 23 rose by 256K, higher than forecasts but lower than the previous week’s 261K. That said, gold regained some bullishness as a stagflation scenario in the US economy looms. However, XAUUSD traders should be aware of US Treasury yields and the US dollar reaction to forwarding data. At the time of writing, the US Dollar Index is rising 0.12%, at 106.598, while the US 10-year Treasury yield collapsed almost ten bps, at 2.685%, a tailwind for the yellow metal.
At the same time, the US Department of Labor reported that Initial Jobless Claims for the week ending on July 23 rose by 256K, higher than forecasts but lower than the previous week’s 261K. That said, gold regained some bullishness as a stagflation scenario in the US economy looms. However, XAUUSD traders should be aware of US Treasury yields and the US dollar reaction to forwarding data. At the time of writing, the US Dollar Index is rising 0.12%, at 106.598, while the US 10-year Treasury yield collapsed almost ten bps, at 2.685%, a tailwind for the yellow metal.