Gold Prices Climb Amid Inflation Data and Fed Speculations
10 July 2024
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Gold prices rose during Tuesday’s North American session, with XAU/USD reaching $2,364, marking an increase of over 0.25%. This upward movement underscores the market’s sensitivity to upcoming inflation data and Federal Reserve policy expectations.
Key Events and Data:
- US Inflation Data: Focus on the Consumer Price Index (CPI) and Producer Price Index (PPI) releases.
- Economists’ Predictions: Annual consumer price inflation expected to have eased to 3.1% in June, down from 3.3% in May.
- Fed Chair Powell’s Testimony: Concerns voiced about the risks of maintaining high interest rates for too long.
This week’s economic calendar is focused on key US inflation data, with the Consumer Price Index (CPI) and Producer Price Index (PPI) set to be released. Economists surveyed by Reuters anticipate a further decline in inflation, predicting annual consumer price inflation to have eased to 3.1% in June, down from 3.3% in May. Such a decline could bolster the case for multiple Federal Reserve interest rate cuts this year.
In a notable development, Federal Reserve Chair Jerome Powell, during his testimony before the Senate Banking, Housing, and Urban Affairs Committee, voiced concerns about the potential risks of maintaining high interest rates for too long, which could hinder economic growth, as reported by CNBC.
Gold prices advanced, with XAU/USD trading at $2,364, up by over 0.25%. The first resistance level for gold might be the July 5 high at $2,392. Conversely, if gold fails to hold at nearer support levels, the next support zone could be the May 3 low of $2,277.
