Gold (XAU/USD) Analysis
- Gold prices to remain sensitive to dovish rate expectations, softer USD and yields
- September Fed rate cut fully priced in
- Major catalyst required to resuscitate suppressed gold volatility
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Gold Prices to Remain Sensitive to Dovish Rate Expectations
Gold has appreciated, buoyed by last week’s lower US CPI data with the path of least resistance to the upside. The precious metal thrives in a low interest rate environment and the mere anticipation of a rate cut from the Fed in September has re-awoken gold bulls.
The precious metal had been hovering around the 161.8% Fibonacci extension of the major 2020 – 2022 decline before the reacceleration to the upside. Gold prices subsided after reaching a new all-time high in May as China, the world’s largest purchaser of the precious metal, dialed back its monthly purchases.
Gold (XAU/USD) Daily Chart
