Market Analysis

Gold prices (XAU/USD) began the new week on a subdued note, trading within a range below a recent peak near $2,340. This followed the release of the US Personal Consumption Expenditures (PCE) Price Index on Friday, which reinforced expectations that the Federal Reserve might cut interest rates in September and December. As a result, the US Dollar retreated from its recent highs, providing support to gold prices.

Additionally, ongoing geopolitical tensions and uncertainty surrounding France's surprise snap election outcome continued to bolster gold's safe-haven appeal. Meanwhile, the Fed's projection of a single interest rate cut in 2024, coupled with discussions favoring a longer period of higher rates, impacted US Treasury bond yields, potentially limiting gold's gains.

From a technical standpoint, gold faces resistance near the 50-day Simple Moving Average (SMA) around the $2,338-2,340 range. Overcoming this level could pave the way for a rise towards the $2,360-2,365 zone, potentially targeting the $2,400 mark and beyond. Conversely, a decline may find support near $2,300 and $2,285, with a break below suggesting further downside towards the 100-day SMA near $2,259 and potentially to $2,225-2,220.

Overall, market dynamics including economic data and geopolitical developments will likely continue to influence gold prices in the near term.

Paraphrasing text from "FX Street" all rights reserved by the original author.