Friday’s increase in gold prices put them on track for their first weekly gain in four weeks as US economic data suggested that price pressures were lessening, stoking hopes that the Federal Reserve would soon cut interest rates. By 0959 GMT, spot gold had increased by 0.8% to $2,320.90 an ounce. So far this week, the price of gold has risen by 1.3%
Due to a combination of central bank buying and demand for safe havens fueled by geopolitical and economic uncertainty, gold significantly increased from March to May, when spot prices reached a record $2,449.89 per ounce on May 20.
Gold now seems to be stuck around $2,300 as the metals market consolidates, with no notable downside levels breached or contested, according to Ole Hansen, head of commodity strategy at Saxo Bank. We conclude that there is sufficient underlying demand to keep the current consolidation from turning into a significant correction,” Hansen stated.
According to the CME FedWatch Tool, traders are now projecting a 67% chance of a US rate cut in September, which supports non-yielding bullion prospects. This comes after US data revealed that producer prices unexpectedly dropped in May and consumer prices remained unchanged in May for the first time in almost two years.
However, according to a note from Kinesis Money, technical indicators for gold have gotten worse this week. The 50-day moving average has turned into a resistance level, and a head-and-shoulders pattern—a bearish pattern of three peaks on the chart, with the middle peak being the highest has become visible.
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