Gold prices remain stable, awaiting new developments to prompt movement. Uncertainty surrounds interest rates, with September’s Non-Farm Payrolls (NFP) potentially altering expectations.
The US Consumer Price Index (CPI) met predictions, leaving markets unaffected. There’s a strong belief in a September interest rate cut, with some considering a 50 basis point move, though that may be excessive if strong economic data emerges before the Federal Open Market Committee (FOMC) meets.
Gold Price Forecast
Long-term, gold is expected to trend upwards due to anticipated Fed easing and falling real yields. In the short term, re-evaluations of interest rate expectations may cause temporary declines.
On the daily chart, gold trades within the 3,438 resistance and 3,245 support range. A breakout in either direction is pending further catalysts. The four-hour chart shows minor support at 3,330, where buyers have positioned for potential rallies.
On the hourly chart, a minor upward trendline indicates bullish momentum. Buyers will rely on this to drive prices higher, while sellers aim for a breakdown to push toward lower supports. Key upcoming economic reports include the US Producer Price Index and Jobless Claims, followed by US Retail Sales and the University of Michigan Consumer Sentiment report.
Gold continues to trade sideways as we wait for a clear signal to break out of this range. The July CPI report, which showed inflation cooling slightly to 2.8%, was not enough to move the needle. All eyes are now on the Federal Reserve’s September meeting for guidance.
Traders’ Expectations
We are still heavily positioned for a rate cut next month, with fed funds futures pricing in an over 80% chance of a 25 basis point reduction. Some aggressive bets are even flirting with a 50 basis point move, which seems overly optimistic. A strong jobs report for August could easily punish this view and cause a sharp repricing.
In the bigger picture, the uptrend for gold should hold as long as real yields continue their downward path with Fed easing. We remember how stubbornly high yields capped gold prices back through much of 2023. Any surprisingly strong economic data in the coming weeks will likely trigger similar short-term corrections.
On the daily chart, we are caught squarely in the middle of a range defined by the key $3,438 resistance and the $3,245 support. Until we see a decisive break, traders will likely continue to buy near the low end and sell near the high end. This timeframe offers little else until one of these key levels gives way.
Looking at the 4-hour chart, we can see a minor support area around the $3,330 level where buyers have recently stepped in. Those looking to go long might see any pullback to this zone as an opportunity with a clear risk below it. Conversely, sellers will be watching for a firm break of this support to trigger a move down towards the main $3,245 floor.
On the 1-hour chart, a minor upward trendline is currently defining the immediate bullish momentum. Buyers will likely lean on this trendline to try and push prices higher within the range. A break of this line would be the first signal for sellers that momentum is shifting, potentially leading to a test of the $3,330 support zone.
Today’s Producer Price Index (PPI) and the latest weekly Jobless Claims data will give us the next clues on inflation and the labor market. We just saw initial claims come in at 225,000, showing continued labor market resilience. Tomorrow, we will wrap up the week with the July Retail Sales figures and the preliminary University of Michigan Consumer Sentiment report.
