Gold
price
escalated
on
Wednesday
for
back-to-back
days
amid
growing
speculation
that
the
Federal
Reserve
(Fed)
could
begin
to
slash
higher
interest
rates
at
the
September
meeting.
Consequently,
US
Treasury
bond
yields
and
the
Greenback
fell,
a
tailwind
for
the
golden
metal.
The
XAU/USD
trades
at
$2,372,
up
by
more
than
0.30%.
Falling
US
Treasury
bond
yields
and
a
soft
US
Dollar
bolstered
the
non-yielding
metal.
The
US
10-year
benchmark
note
coupon
dropped
one-and-a-half
basis
points
(bps)
to
4.288%,
while
the
US
Dollar
Index
(DXY)
trended
below
the
105.00
mark,
losing
0.06%.
In
his
appearance
at
the
US
House
of
Representatives,
Fed
Chair
Jerome
Powell
repeated
most
of
his
remarks
revealed
at
a
US
Senate
committee
on
Tuesday.
He
acknowledged
the
progress
on
inflation,
yet
Powell
stated
the
board
is
not
confident
that
lowering
rates
will
help
prices
reach
the
2%
goal.
Despite
ongoing
pullbacks,
Gold
remains
underpinned
by
a
second
consecutive
month
of
inflows
into
Gold
exchange-traded
funds
(EFTs)
in
June,
driven
by
additions
to
holdings
by
Europe
and
Asia-listed
funds.
With
Fed
Chair
Powell’s
semi-annual
testimony
in
the
rearview
mirror,
investors
eye
the
release
of
US
June
inflation
figures
on
Thursday.
That,
Initial
Jobless
Claims
and
the
University
of
Michigan
Consumer
Sentiment
data
will
set
Gold’s
direction.
Despite
forming
a
bearish
Harami
candlestick
pattern
after
breaching
the
Head-and-Shoulders
neckline,
Gold
has
resumed
its
ongoing
uptrend
yet
remains
shy
of
hitting
weekly
highs
set
on
Monday
at
$2,391
a
troy
ounce.
Momentum
shifted
in
favor
of
buyers
as
shown
by
the
Relative
Strength
Index
(RSI),
which
remains
bullish
above
the
50-neutral
line
and
aims
upward.
Hence,
the
path
of
least
resistance
is
to
the
upside.
The
XAU/USD
first
resistance
would
be
the
July
5
high
at
$2,392,
followed
by
the
$2,400
figure.
A
further
upside
is
seen,
with
the
next
resistance
lying
at
the
year-to-date
high
of
$2,450,
ahead
of
the
$2,500
mark.
Conversely,
if
XAU/USD
slumps
below
$2,350,
the
golden
metal
might
decline
to
the
$2,300
level.
If
this
support
fails,
the
next
demand
zone
would
be
the
May
3
low
of
$2,277,
followed
by
the
March
21
high
of
$2,222.
Inflationary
or
deflationary
tendencies
are
measured
by
periodically
summing
the
prices
of
a
basket
of
representative
goods
and
services
and
presenting
the
data
as
The
Consumer
Price
Index
(CPI).
CPI
data
is
compiled
on
a
monthly
basis
and
released
by
the
US
Department
of
Labor
Statistics.
The
YoY
reading
compares
the
prices
of
goods
in
the
reference
month
to
the
same
month
a
year
earlier.The
CPI
is
a
key
indicator
to
measure
inflation
and
changes
in
purchasing
trends.
Generally
speaking,
a
high
reading
is
seen
as
bullish
for
the
US
Dollar
(USD),
while
a
low
reading
is
seen
as
bearish.
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