Gold prices hovered near their one-week peak during early Asian trading on Thursday following the U.S. Federal Reserve's predictable interest rate hike. Investors analyzed the moderately balanced remarks made by Chair Jerome Powell.
Key Points:
* Spot gold traded 0.2% higher at $1,975.05 per ounce as of 0114 GMT, marking its highest level since July 20.
* U.S. gold futures also saw a 0.2% increase, reaching $1,974.70.
* The Federal Reserve raised interest rates by 0.25 percentage point on Wednesday, placing the benchmark overnight interest rate in the range of 5.25%-5.50%. The possibility of another 25 basis points hike at the September meeting was suggested, considering a broad range of data.
* Fed Chair Jerome Powell noted that the economy still needed to slow down, and the labor market should weaken for inflation to return "credibly" to the central bank's 2% target, though they are no longer forecasting a U.S. recession.
* Gold is highly sensitive to rising interest rates, which increase the opportunity cost of holding non-yielding bullion.
* The dollar and U.S. Treasury yields slightly rebounded after falling on Wednesday, thereby limiting the gains in bullion prices.
* Data-wise, the United States is expected to report a 1.8% annualized increase in Q2 gross domestic product, while initial claims for unemployment benefits are anticipated to rise by 7,000 to a seasonally adjusted 235,000 for the week ending July 22.
* The focus also shifts to the policy decisions of the European Central Bank and Bank of Japan this week. The ECB is expected to raise rates for the ninth time on Thursday, followed by adopting a "data-dependent" approach.
GOLD
SELL LIMIT 1983 - 1985🕯🕯
✔️✔️ TP1: 1978
✔️✔️ TP2: 1973
✔️✔️ TP3: 1968
❌ SL: 1989
Key Points:
* Spot gold traded 0.2% higher at $1,975.05 per ounce as of 0114 GMT, marking its highest level since July 20.
* U.S. gold futures also saw a 0.2% increase, reaching $1,974.70.
* The Federal Reserve raised interest rates by 0.25 percentage point on Wednesday, placing the benchmark overnight interest rate in the range of 5.25%-5.50%. The possibility of another 25 basis points hike at the September meeting was suggested, considering a broad range of data.
* Fed Chair Jerome Powell noted that the economy still needed to slow down, and the labor market should weaken for inflation to return "credibly" to the central bank's 2% target, though they are no longer forecasting a U.S. recession.
* Gold is highly sensitive to rising interest rates, which increase the opportunity cost of holding non-yielding bullion.
* The dollar and U.S. Treasury yields slightly rebounded after falling on Wednesday, thereby limiting the gains in bullion prices.
* Data-wise, the United States is expected to report a 1.8% annualized increase in Q2 gross domestic product, while initial claims for unemployment benefits are anticipated to rise by 7,000 to a seasonally adjusted 235,000 for the week ending July 22.
* The focus also shifts to the policy decisions of the European Central Bank and Bank of Japan this week. The ECB is expected to raise rates for the ninth time on Thursday, followed by adopting a "data-dependent" approach.
GOLD
SELL LIMIT 1983 - 1985🕯🕯 ✔️✔️ TP1: 1978
✔️✔️ TP2: 1973
✔️✔️ TP3: 1968
❌ SL: 1989
