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Gold prices rose on Tuesday due to a weaker dollar, as traders eagerly awaited a highly anticipated rate hike and sought clues on monetary policy from the U.S. Federal Reserve over the next two days.
As of 0708 GMT, spot gold (GOLD) increased by 0.3% to $1,961.13 per ounce. Meanwhile, U.S. gold futures (GOLD) remained mostly flat at $1,962.80.
The decline in the dollar index (DXY) from its near-two-week peak supported gold prices, as a weaker dollar makes bullion more affordable for buyers using other currencies.
Matt Simpson, a senior market analyst at City Index, expressed his belief that after a four-day decline, gold would likely hold above $1,950 and aim for a technically-driven retracement towards $1,960–$1,965 on that day. However, he emphasized that a significant move would depend on the conclusion of the FOMC meeting.
Market attention was focused on what Fed Chair Jerome Powell would say on Wednesday and European Central Bank President Christine Lagarde on Thursday, regarding the monetary policy outlook for their respective September meetings.
Gold is highly sensitive to rising interest rates as they increase the opportunity cost of holding non-yielding bullion. Simpson indicated that gold's best chance of reaching record highs would be when "the Fed announces an end to their tightening cycle without a recession on the horizon."
Recent data showed a slowdown in U.S. and Europe business activity in July, suggesting that both central banks might be nearing the end of their rate-hike cycles.
Traders using CME's Fedwatch tool predicted that the Fed would maintain interest rates in the 5.25%-5.5% range until 2024.
Hareesh V., head of commodity research at Geojit Financial Services, suggested that a mild pullback might be the possible trend for the entire week, as the U.S. dollar index was also experiencing a slight recovery.
In China, gold consumption saw a year-on-year increase of 16.37%, and production of gold enterprises returned to normal in the first half of 2023.
XAUUSD BUY LIMIT 1952 - 1955💯💯
✅ TP1: 1960
✅ TP2: 1965
✅ TP3: 1970
🛑 SL: 1948
As of 0708 GMT, spot gold (GOLD) increased by 0.3% to $1,961.13 per ounce. Meanwhile, U.S. gold futures (GOLD) remained mostly flat at $1,962.80.
The decline in the dollar index (DXY) from its near-two-week peak supported gold prices, as a weaker dollar makes bullion more affordable for buyers using other currencies.
Matt Simpson, a senior market analyst at City Index, expressed his belief that after a four-day decline, gold would likely hold above $1,950 and aim for a technically-driven retracement towards $1,960–$1,965 on that day. However, he emphasized that a significant move would depend on the conclusion of the FOMC meeting.
Market attention was focused on what Fed Chair Jerome Powell would say on Wednesday and European Central Bank President Christine Lagarde on Thursday, regarding the monetary policy outlook for their respective September meetings.
Gold is highly sensitive to rising interest rates as they increase the opportunity cost of holding non-yielding bullion. Simpson indicated that gold's best chance of reaching record highs would be when "the Fed announces an end to their tightening cycle without a recession on the horizon."
Recent data showed a slowdown in U.S. and Europe business activity in July, suggesting that both central banks might be nearing the end of their rate-hike cycles.
Traders using CME's Fedwatch tool predicted that the Fed would maintain interest rates in the 5.25%-5.5% range until 2024.
Hareesh V., head of commodity research at Geojit Financial Services, suggested that a mild pullback might be the possible trend for the entire week, as the U.S. dollar index was also experiencing a slight recovery.
In China, gold consumption saw a year-on-year increase of 16.37%, and production of gold enterprises returned to normal in the first half of 2023.
XAUUSD BUY LIMIT 1952 - 1955💯💯✅ TP1: 1960
✅ TP2: 1965
✅ TP3: 1970
🛑 SL: 1948
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