Gold price secures third week of gains, holds above $2,400

• 
  Gold
  price
  sticks
  to
  key
  support
  level,
  set
  for
  third
  consecutive
  weekly
  gain
  on
  Fed
  rate
  cut
  expectations.
• 
  US
  PPI
  rises
  above
  estimates;
  University
  of
  Michigan
  Consumer
  Sentiment
  drops,
  inflation
  expectations
  moderate.
• 
  CME
  FedWatch
  Tool
  indicates
  94%
  chance
  of
  September
  rate
  cut;
  US
  Dollar
  Index
  falls
  over
  0.40%
  to
  104.09.

Gold’s
price
clung
above
$2,400
on
Friday
after
hitting
a
daily
low
of
$2,391.
The
golden
metal
is
set
to
extend
its
gains
for
the
third
consecutive
week
on
speculation
that
the

Federal
Reserve
(Fed)
might
begin
its
easing
cycle
in
September.
Data
from
the
US
Department
of
Labor
showed
that
factory
prices
rose
above
estimates,
though
they
failed
to
underpin
the
Greenback,
a
tailwind
for
the
precious
metal.

The

XAU/USD
trades
at
$2,415,
virtually
unchanged.
The
US
Bureau
of
Labor
Statistics
on
Friday
revealed
that
the
Producer
Price
Index
(PPI)
jumped
modestly
in
June,
above
analysts’
estimates.
The
University
of
Michigan
Consumer
Sentiment
preliminary
July
reading
deteriorated,
but
inflation
expectations
have
tempered.

According
to
the
CME
FedWatch
Tool,
traders
are
pricing
a
94%
chance
that
the
Fed
might
cut
rates
a
quarter
of
a
percentage
point
in
September.

Hence,
US
Treasury
bond
yields
are
dropping,
a
tailwind
for
the
non-yielding
metal,
which
benefits
from
low
yields.
The
US
10-year
Treasury
note
coupon
is
yielding
4.19%,
two
basis
points
below
its
opening
price.

Sources
cited
by
Barron’s
stated,
“Inflation
is
coming
down,
but
it
is
not
going
to
disappear.
Gold
and
gold
miners
are
attractive
inflation
hedges.”

Meanwhile,
Fed
officials
have
remained
cautious
regarding
monetary
policy
shifts.
Chicago
Fed
President
Goolsbee
noted
that
recent
inflation
data
is
“favorable”
and
could
shorten
the
Fed’s
journey
toward
its
inflation
goals.

St.
Louis
Fed
President
Alberto
Musalem
stated
that
the
current
interest
rate
level
is
appropriate
for
the
current
conditions
and
expects
the
economy
to
grow
between
1.5%
and
2%
this
year.

Meanwhile,
the
US
Dollar
Index
(DXY),
which
tracks
the
Greenback
against
a
basket
of
six
currencies,
plummeted
more
than
0.40%
to
104.09.

Daily
digest
market
movers:
Gold
price
flatlines
post
US
PPI

• June
  US
  Producer
  Price
  Index
  (PPI)
  increased
  by
  0.2%
  MoM,
  exceeding
  the
  expected
  0.1%
  and
  higher
  than
  May’s
  0%.
  Core
  PPI
  rose
  by
  0.4%
  MoM,
  surpassing
  the
  forecast
  of
  0.2%.
• On
  an
  annual
  basis,
  PPI
  ticked
  up
  from
  2.4%
  to
  2.6%,
  beating
  the
  forecast
  of
  2.3%.
  Underlying
  inflation
  increased
  to
  3%,
  up
  from
  2.6%.
• UoM
  Consumer
  Sentiment
  dropped
  from
  68.2
  in
  June
  to
  66.0
  in
  July.
  Inflation
  expectations
  for
  one
  year
  were
  as
  expected
  at
  2.9%,
  down
  from
  3%.
• US
  Dollar
  Index
  (DXY),
  which
  tracks
  the
  value
  of
  a
  basket
  of
  six
  currencies
  against
  the
  US
  Dollar,
  fell
  more
  than
  0.30%
  to
  104.12.
• According
  to
  the
  CME
  FedWatch
  Tool,
  the
  odds
  of
  a
  September
  rate
  cut
  are
  88%,
  up
  from
  85%
  on
  Thursday.
• December
  2024
  fed
  funds
  rate
  futures
  contract
  implies
  that
  the
  Fed
  will
  ease
  policy
  by
  49
  basis
  points
  (bps)
  toward
  the
  end
  of
  the
  year,
  up
  from
  39
  a
  day
  ago.
• Bullion
  prices
  retreated
  slightly
  due
  to
  the
  People’s
  Bank
  of
  China
  (PBoC)
  decision
  to
  halt
  gold
  purchases
  in
  June,
  as
  it
  did
  in
  May.
  By
  the
  end
  of
  June,
  China
  held
  72.80
  million
  troy
  ounces
  of
  the
  precious
  metal.

Technical
analysis:
Gold
buyers
take
a
respite,
Gold
price
hovers
above
$2,400

Gold
price
consolidates
above
$2,400
for
the
second
straight
day
after
decisively
breaking
the
Head-and-Shoulders
neckline.
Momentum
favors
buyers,
though
as
depicted
by
the
flat
Relative
Strength
Index
(RSI),
they’re
taking
a
respite
before
testing
higher
prices.

That
said,
the
path
of
least
resistance
is
to
the
upside.
The
XAU/USD’s
first
resistance
would
be
the
year-to-date
high
of
$2,450,
ahead
of
the
$2,500
mark.
Conversely,
if
Gold
slides
below
the
$2,400
figure,
the
next
demand
zone
will
be
July
5
high
at
$2,392.
If
cleared,
XAU/USD
would
continue
to
$2,350.