Despite early gold price news updates of lower new orders and business activity/production in July, a recent uptick in the services PMI suggests a sustained momentum in the US economy.
In this week’s gold price news update, the precious metal continues to show a significant inverse relationship with the US dollar (USD) and US treasury bond yields
Citigroup’s economic surprise index, surpassing its counterparts, implies further positive surprises for the US economy, potentially favoring the USD. The pressure on gold price news updates persists as the US 10-year treasury yield looks poised for a weekly upturn.
Gold has maintained its support level at $1915 and presently hovers slightly above the 200-day simple moving average (SMA). Short-term gold direction hinges on incoming data, particularly as the Federal Reserve approaches peak interest rates.
Should the Consumer Price Index (CPI) exceed expectations, markets may anticipate a final 25-bps rate hike before the Fed reaches its interest rate zenith. Conversely, a lower CPI print might temporarily ease financial conditions, providing relief for gold price news updates.
The weekly chart of gold price news updates highlights a potential breakout, although the descending channel suggests limited upward movement for gold prices. A pivotal level to monitor for a sustained bullish trend is $1956, while $1875 stands as crucial support.
Chicago Fed President Austan Goolsbee expressed hope for a balanced economic path, emphasizing persistently high inflation
Meanwhile, John Williams pointed to a stabilizing labor market and slower wage growth as signs of policy effectiveness, awaiting further data, including the US CPI next week.
Looking ahead, next Wednesday’s release of US inflation data, just ahead of the Fed meeting, is anticipated to have a significant impact. Additionally, past trends indicate that Producer Price Index (PPI) dynamics often lead to the repricing of the dollar. August’s US gold price news update figures will provide crucial insights into consumer spending behavior amid rising interest rates, though a robust job market with an unemployment rate below 4% suggests strong economic activity.
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