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The focus of market players today should be focused on the US consumer price data report (Consumer Price Index/CPI) that will be reported tonight.
The initial report of expected US CPI data showed an increase in readings of only 0.2% in July 2024. This has simultaneously sparked confidence in investors that the implementation of interest rate cuts by the Fed is seen to be implemented at the FOMC meeting in September 2024.
Following that, this sentiment has pushed the American Dollar to continue to trade low since the beginning of this week while also supporting the demand for the gold market.
In addition, the situation during the geopolitical conflict in the Middle East is getting worse. Market players are now bracing for the possibility of an Iranian counterattack against Israel. Therefore, this situation is seen to continue to support the demand for gold in the global market.
If the US CPI data report tonight is seen to report a reading that is lower than expected, it is seen to be able to add sustainable confidence to the expectations of the FED in implementing interest rate cuts while putting strong pressure on the weakness of the American Dollar.
Technical Analysis
Based on the daily chart, the $2,471 price level is the main focus today. If the level is successfully broken, gold price seen to be able to re-challenge the price of $2,484 before continuing to trade high up to the $2,500 level.
However, if tonight's CPI data report shows a significant increase in inflation above 0.2% (MoM), this could trigger a significant increase in gold sales at least up to the $2,420 price level.
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