Gold price prepares to extend upside ahead of US PMI data
Gold price (XAU/USD) strengthens this week as the rally in US Treasury yields halts amid fading hopes of more interest-rate increases from the Federal Reserve (Fed). US headline Consumer Price Index (CPI) has come down to 3.2% from its peak of 9.1% due to an aggressive rate-tightening cycle, but the Fed will likely have to keep interest rates higher for a longer period as the remaining excess inflation above the desired rate of 2% seems extremely stubborn.
In his commentary at the Jackson Hole Symposium, Fed Chair Jerome Powell is expected to explain the benefits of keeping rates higher for longer and he is also likely to avoid supporting further policy-tightening in the absence of encouraging economic data. Before the Jackson Hole event, investors will keep an eye on preliminary S&P Global PMI data, which will be released at 13:45 GMT.
Gold price attempts to deliver a break of the consolidation formed in a range of $1,885-1,900 in the past week. The precious metal rebounds after hitting a fresh five-month low near $1,885.00. However, the broader bias is still favoring the downside due to strengthening US Treasury yields. Despite a three-day recovery, the yellow metal struggles around the 200-day Exponential Moving Average (EMA). Declining 20 and 50-day EMAs indicate a bearish mid-term trend.
Gold price attempts to deliver a break of the consolidation formed in a range of $1,885-1,900 in the past week. The precious metal rebounds after hitting a fresh five-month low near $1,885.00. However, the broader bias is still favoring the downside due to strengthening US Treasury yields. Despite a three-day recovery, the yellow metal struggles around the 200-day Exponential Moving Average (EMA). Declining 20 and 50-day EMAs indicate a bearish mid-term trend.