Article by: ETO Markets

Gold prices (XAU/USD) rose for the second day in a row on Monday, but still failed to break through the $2,400 mark. Us inflation edged up in June, according to the Personal consumption expenditure price index released on Friday, further raising expectations that the Federal Reserve will start cutting interest rates in September. This expectation caused US Treasury yields to fall and the US dollar (USD) to remain weak, providing a boost to non-yielding gold. In addition, geopolitical risks from conflicts in the Middle East have also provided additional support for gold prices. However, optimism in global equity markets limited gold's upside, with traders preferring to wait for the upcoming Federal Open Market Committee (FOMC) meeting and upcoming key US macro data, including the non-farm payrolls report (NFP), before making their next move.

From a technical point of view, gold prices recently failed to fall below the 50-day moving average and subsequently rebounded, showing some support. However, bulls are still struggling to break through the $… mark. Until then, gold could see resistance near $…. A sustained move higher would signal the end of the corrective decline from the all-time high reached earlier this month and set the stage for further gains, targeting intermediate resistance levels of $…-… and all-time highs of $…-…. On the other hand, a break below $… could continue to attract buyers located near the 50-day moving average in the $…- $… area. A sustained break below the above support level would be seen as a new trigger for bearish traders and drag gold to the $… area. The downward trajectory could extend further, testing the round $… mark for the first time since late June.