Gold Price Eyes Breakout Above $2,685 as Fed Signals and PCE Data Drive Momentum

Gold (XAU/USD) is trading around $2,669.45, maintaining its bullish stance within an ascending triangle pattern. This technical formation is a positive signal, often associated with upward momentum.

Gold’s solid support near $2,665 is bolstered by the ascending trendline, creating a firm foundation for potential buyers to enter the market. Immediate resistance lies at $2,684.70, followed by further resistance at $2,696.57 and a critical level at $2,708.10.

If gold can push past these resistance points, further gains could be on the horizon.

Impact of Recent Economic Data on Gold

Several key economic indicators were released on Thursday, with varying effects on the gold market. The final GDP for Q2 held steady at 3.0%, aligning with market expectations.

However, the U.S. unemployment claims came in slightly lower at 218K, compared to the forecast of 224K, which didn’t provide any major surprises. Durable Goods Orders remained flat at 0.0%, showing a notable drop from July’s massive 9.8% growth.

Gold reaches a new record high at $2,660/oz, marking six straight days of gains. The surge is fueled by expectations of lower US rates weakening the dollar. Key events ahead: US GDP release, Fed Chair Powell’s speech, and US PCE data. #Gold #Markets #Trading #cfdtrading

— CFD and Futures Trading (@CFDandFutures) September 26, 2024

Despite stronger GDP figures, the overall economic data suggests the U.S. economy remains in a precarious position. Pending Home Sales fell sharply by 5.5%, missing expectations, while Fed Chair Jerome Powell’s remarks during his Thursday speech indicated that interest rate cuts may remain on the table.

The market is now pricing in a 60% probability of a 50 basis point rate cut, which could further support gold prices by weakening the U.S. Dollar.

Key Events to Watch: Core PCE Data and Consumer Sentiment

Looking ahead to Friday, the focus shifts to the release of the U.S. Core PCE Price Index and the Revised University of Michigan Consumer Sentiment Index.

Both reports are critical in shaping market expectations for the Federal Reserve’s next move. The Core PCE, expected at 0.2%, is the Fed’s preferred inflation gauge.

USA is facing massive recession , no amount of Fed FOMC rate cuts will save it . In fact rate cuts will make things worse . Gold and Bitcoin are reflection of hyper inflation

— Observer2021 (@Observer20211) September 27, 2024

Should the report meet or exceed expectations, it could influence the Fed’s interest rate decisions in November.

Additionally, the University of Michigan’s Consumer Sentiment Index, projected at 69.3, will provide insights into consumer confidence and could impact overall market sentiment.

Conclusion: Gold Primed for Further Upside

With the current ascending triangle pattern supporting gold near the $2,665 level, and a weak U.S. Dollar potentially on the horizon due to dovish Fed expectations, gold seems well-positioned for further gains.

Immediate resistance at $2,684.70 could be the next target for bulls, while support from the 50-day EMA at $2,662.46 offers a strong safety net.

Traders should keep a close eye on upcoming economic reports, as these will likely determine gold’s short-term trajectory.

Key Insights:

• Immediate Resistance: $2,684.70; next levels at $2,696.57 and $2,708.10.
• Immediate Support: $2,662.51; further support at $2,649.97 and $2,638.69.
• Fed Outlook: Powell’s speech and upcoming PCE data likely to influence future gold moves.