Article by: ETO Markets

Gold prices continued their strong momentum today amid expectations of a Fed rate cut and uncertainty in the global economy. Market expectations are growing that the Fed will cut interest rates in September and December. According to the latest market data, the probability of the Fed cutting interest rates in September has exceeded 90%. While the dollar attracted some buying on Monday and rebounded from a three-month low, gains were limited. The weakness of the US dollar is due to dovish expectations from the Federal Reserve, which further enhances the appeal of gold. Any rebound in the dollar would weigh on gold prices, but the current market environment suggests that the upside for the greenback is limited. Us PPI data for June, released on Friday, came in higher than expected, but did not significantly change market expectations for a Fed rate cut. In addition, the Bureau of Labor Statistics data showed that the overall consumer price index (CPI) fell 0.1% in June from the previous month, the lowest level in more than three years. The market will closely watch the upcoming U.S. Empire Manufacturing Index and the speech of Federal Reserve Chairman Jerome Powell for more market clues.

From a technical perspective, the oscillators on the daily chart remain in positive territory and have not entered overbought territory, indicating that the overall uptrend remains solid despite the possibility of a pullback in the short term. The Relative Strength Index (RSI) also suggests that gold's upward momentum remains strong. Gold prices have found strong support near $…, and a pullback below that level could be seen as a buying opportunity. Further support is in the $…- $… area. On the upside, $… is a key near-term resistance level, and if gold breaks above that level, it could usher in a new wave of gains aimed at the all-time high of $… reached in May.