Gold shines as US yields tumble ahead of US inflation report

• 
  Gold
  surges
  amid
  growing
  expectations
  of
  Fed
  rate
  cuts
  in
  September.
• 
  US
  10-year
  Treasury
  yield
  drops
  to
  4.288%,
  while
  US
  Dollar
  Index
  falls
  below
  105.00.
• 
  Inflows
  into
  Gold
  ETFs
  support
  the
  metal,
  with
  eyes
  now
  on
  US
  June
  inflation
  data
  and
  economic
  indicators.

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.

Daily
digest
market
movers:
Gold
price
escalates
on
Fed
rate
cut
hopes

• US
  CPI
  is
  expected
  to
  decrease
  from
  3.3%
  to
  3.1%
  annually
  in
  June,
  while
  core
  inflation
  is
  projected
  to
  remain
  steady
  at
  3.4%
  YoY.
• According
  to
  the
  consensus,
  Initial
  Jobless
  Claims
  for
  the
  week
  ending
  July
  6
  are
  expected
  to
  increase
  from
  238K
  to
  240K.
• July
  Consumer
  Sentiment
  is
  forecast
  to
  improve
  to
  68.5,
  up
  from
  68.2
  in
  June,
  according
  to
  the
  consensus.
• Bullion
  prices
  retreated
  somewhat
  due
  to
  the
  People’s
  Bank
  of
  China’s
  (PBoC)
  decision
  to
  halt
  Gold
  purchases
  in
  June
  as
  it
  did
  in
  May.
  China
  held
  72.80
  million
  troy
  ounces
  of
  the
  precious
  metal
  at
  the
  end
  of
  June.
• According
  to
  data
  from
  the
  CME
  FedWatch
  Tool,
  investors
  are
  pricing
  in
  71%
  odds
  of
  a
  Fed
  rate
  cut
  in
  September,
  up
  from
  70%
  on
  Tuesday.
• December
  2024
  fed
  funds
  rate
  futures
  contract
  implies
  that
  the
  Fed
  will
  ease
  policy
  by
  39
  basis
  points
  (bps)
  toward
  the
  end
  of
  the
  year.

Technical
analysis:
Gold
price
consolidates
around
$2,370

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.