Gold price holds positive ground ahead of Fed Chair Powell’s second testimony
-
The
Gold
price
gains
traction
in
Wednesday’s
early
European
session. -
Rising
Fed
rate
cut
bets
continue
to
lift
the
yellow
metal. -
The
PBoC
refrained
from
buying
gold
for
a
consecutive
month,
limits
XAU/USD
upside.
The
Gold
price
(XAU/USD)
trades
with
mild
gains
on
Wednesday
during
the
early
European
session.
The
growing
speculation
that
the
US
Federal
Reserve
(Fed)
is
likely
to
start
cutting
rates
as
early
as
September
continues
to
support
the
non-yielding
metal.
Furthermore,
political
uncertainties
within
Europe
and
globally
might
boost
Gold
price,
a
traditional
safe-haven
asset.
On
the
other
hand,
the
pause
of
China’s
central
bank
Gold
purchases
for
a
second
consecutive
month
might
prompt
traders
to
reduce
bullish
bets
in
the
yellow
metal
as
China
is
the
world’s
largest
gold
consumer.
Investors
will
keep
an
eye
on
the
second
semi-annual
testimony
by
Federal
Reserve
(Fed)
Chair
Jerome
Powell
on
Wednesday,
along
with
speeches
by
the
Fed’s
Michelle
Bowman
and
Austan
Goolsbee.
On
Thursday,
the
US
Consumer
Price
Index
(CPI)
inflation
data
will
be
closely
monitored.
This
data
might
offer
more
clarity
on
the
US
interest
rate
path.
Daily
Digest
Market
Movers:
Gold
price
gains
traction
amid
rising
Fed
rate
cut
bets
-
China
held
its
gold
reserves
steady
for
the
second
month
in
a
row
in
June,
after
an
18-month
period
of
purchases.
Official
data
from
China’s
central
bank
shows
its
gold
reserves
holdings
at
2,264
tonnes. -
Federal
Reserve
(Fed)
Chair
Jerome
Powell
said
in
testimony
Tuesday
to
Congress
that
the
most
recent
inflation
data
showed
some
modest
further
progress
and
“more
good
data”
could
open
the
door
to
interest
rate
cuts. -
Powell
emphasized
that
the
central
bank
will
continue
to
make
decisions
on
monetary
policy
meeting
by
meeting,
adding
that
holding
interest
rates
too
high
for
too
long
could
jeopardize
economic
growth. -
Powell
further
stated
that
inflation
readings
over
the
first
three
months
of
this
year
did
not
boost
Fed
officials’
confidence
that
inflation
was
coming
under
control. -
Financial
markets
are
now
pricing
in
74%
odds
of
a
Fed
rate
cut
in
September,
up
from
71%
last
Friday,
according
to
data
from
the
CME
FedWatch
tool.
Technical
Analysis:
Gold
price
holds
bullish
in
the
longer
term
The
gold
price
trades
on
a
stronger
note
on
the
day
following
the
break
above
the
descending
channel.
The
precious
metal
maintains
its
uptrend
above
the
key
100-day
Exponential
Moving
Average
(EMA)
on
the
daily
timeframe.
The
upward
momentum
is
also
supported
by
the
14-day
Relative
Strength
Index
(RSI),
which
stands
in
the
bullish
zone
around
55.0.
The
crucial
resistance
level
for
yellow
metal
will
emerge
at
the
$2,400
psychological
level.
The
next
hurdle
is
seen
at
$2,432,
a
high
of
April
12.
Sustained
trading
above
this
level
could
set
XAU/USD
for
a
potential
retest
of
the
all-time
high
of
$2,450.
On
the
other
hand,
sustained
trading
below
$2,340,
the
former
resistance
level,
could
draw
in
enough
bearish
demand
to
head
$2,318,
a
low
of
July
1.
The
next
contention
level
to
watch
is
$2,274,
the
100-day
EMA.
US
Dollar
price
in
the
last
7
days
The
table
below
shows
the
percentage
change
of
US
Dollar
(USD)
against
listed
major
currencies
in
the
last
7
days.
US
Dollar
was
the
strongest
against
the
Japanese
Yen.
|
USD |
EUR |
GBP |
CAD |
AUD |
JPY |
NZD |
CHF |
|
|
USD |
-0.66% | -0.81% | -0.34% | -1.17% | -0.01% | -0.20% | -0.72% | |
|
EUR |
0.66% | -0.16% | 0.32% | -0.50% | 0.65% | 0.45% | -0.06% | |
|
GBP |
0.80% | 0.15% | 0.48% | -0.34% | 0.80% | 0.61% | 0.09% | |
|
CAD |
0.33% | -0.33% | -0.48% | -0.83% | 0.33% | 0.13% | -0.38% | |
|
AUD |
1.15% | 0.50% | 0.36% | 0.82% | 1.14% | 0.94% | 0.42% | |
|
JPY |
0.01% | -0.64% | -0.81% | -0.32% | -1.16% | -0.19% | -0.71% | |
|
NZD |
0.20% | -0.45% | -0.61% | -0.12% | -0.95% | 0.20% | -0.52% | |
|
CHF |
0.71% | 0.03% | -0.09% | 0.39% | -0.45% | 0.68% | 0.51% |
The
heat
map
shows
percentage
changes
of
major
currencies
against
each
other.
The
base
currency
is
picked
from
the
left
column,
while
the
quote
currency
is
picked
from
the
top
row.
For
example,
if
you
pick
the
Euro
from
the
left
column
and
move
along
the
horizontal
line
to
the
Japanese
Yen,
the
percentage
change
displayed
in
the
box
will
represent
EUR
(base)/JPY
(quote).
Inflation
FAQs
Inflation
measures
the
rise
in
the
price
of
a
representative
basket
of
goods
and
services.
Headline
inflation
is
usually
expressed
as
a
percentage
change
on
a
month-on-month
(MoM)
and
year-on-year
(YoY)
basis.
Core
inflation
excludes
more
volatile
elements
such
as
food
and
fuel
which
can
fluctuate
because
of
geopolitical
and
seasonal
factors.
Core
inflation
is
the
figure
economists
focus
on
and
is
the
level
targeted
by
central
banks,
which
are
mandated
to
keep
inflation
at
a
manageable
level,
usually
around
2%.
The
Consumer
Price
Index
(CPI)
measures
the
change
in
prices
of
a
basket
of
goods
and
services
over
a
period
of
time.
It
is
usually
expressed
as
a
percentage
change
on
a
month-on-month
(MoM)
and
year-on-year
(YoY)
basis.
Core
CPI
is
the
figure
targeted
by
central
banks
as
it
excludes
volatile
food
and
fuel
inputs.
When
Core
CPI
rises
above
2%
it
usually
results
in
higher
interest
rates
and
vice
versa
when
it
falls
below
2%.
Since
higher
interest
rates
are
positive
for
a
currency,
higher
inflation
usually
results
in
a
stronger
currency.
The
opposite
is
true
when
inflation
falls.
Although
it
may
seem
counter-intuitive,
high
inflation
in
a
country
pushes
up
the
value
of
its
currency
and
vice
versa
for
lower
inflation.
This
is
because
the
central
bank
will
normally
raise
interest
rates
to
combat
the
higher
inflation,
which
attract
more
global
capital
inflows
from
investors
looking
for
a
lucrative
place
to
park
their
money.
Formerly,
Gold
was
the
asset
investors
turned
to
in
times
of
high
inflation
because
it
preserved
its
value,
and
whilst
investors
will
often
still
buy
Gold
for
its
safe-haven
properties
in
times
of
extreme
market
turmoil,
this
is
not
the
case
most
of
the
time.
This
is
because
when
inflation
is
high,
central
banks
will
put
up
interest
rates
to
combat
it.
Higher
interest
rates
are
negative
for
Gold
because
they
increase
the
opportunity-cost
of
holding
Gold
vis-a-vis
an
interest-bearing
asset
or
placing
the
money
in
a
cash
deposit
account.
On
the
flipside,
lower
inflation
tends
to
be
positive
for
Gold
as
it
brings
interest
rates
down,
making
the
bright
metal
a
more
viable
investment
alternative.
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