Gold Price Sees Limited Upside Amid Fed Rate Hike Bets and Hawkish Central Banks; Geopolitical Risks Offer Support

GOLD price experienced a buying surge during the Asian session on Friday, partially recovering from the previous day’s sharp decline to a two-week low. The rise came after upbeat macro data from the US, but the increasing likelihood of more interest rate hikes by the Federal Reserve (Fed) poses a potential cap on further gains.

Fed Chair Jerome Powell’s recent statements, along with the US Commerce Department’s report of a 2.4% annualized economic expansion in Q2, support the notion of further policy tightening by the Fed. Consequently, this led to a rise in US Treasury bond yields, bolstering the US Dollar and potentially acting as a headwind for the Gold price.

Hawkish stances from major central banks, including the European Central Bank (ECB) and the Bank of England (BoE), add to the caution for bullish traders. While economic headwinds and geopolitical risks offer support to the safe-haven precious metal, the potential for more interest rate hikes could limit significant gains in Gold.

Looking ahead, market focus will be on the US Personal Consumption Expenditures (PCE) Price Index, which could influence expectations regarding the Fed’s next policy move. Traders will also monitor broader risk sentiment, while geopolitical tensions may continue to provide some backing for Gold. However, modest losses are anticipated for GOLD as the focus shifts to upcoming crucial US macro data in the new month.

Gold Technical Outlook

GOLD price has consolidated above the $1945.20 level, signaling a potential bullish rebound as indicated by the positive stochastic signal on the four-hour timeframe. This suggests a bullish bias in the upcoming sessions, with the price likely heading towards testing $1977.25 primarily.As a result, the main positive scenario remains valid, and a break above $1955.00 will further reinforce the positive outlook. However, if the price breaks below $1945.20, it could halt the suggested bullish trend and lead to a decline.The expected trading range for today is between $1940.00 support and $1975.00 resistance.Overall, the expected trend for today is bullish.

ABOUT THE AUTHOR See More

Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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