Gold Daily | Gold Dips as U.S. Consumer Spending Increases, Fed Rate Cut Uncertainty Grows

【Latest Gold Price and Recent Trends】

Gold prices have dropped 0.1% to $2,500/oz, with a daily low of $2,489/oz. The decline follows a significant increase in U.S. consumer spending for July, which has dampened expectations for a 50 basis points rate cut by the Federal Reserve.

【Technical Analysis】

Gold prices are fluctuating between the support level of $2,489.95 and the pivot point of $2,504.95. A break above the pivot may target $2,515.26 and $2,529.03, indicating a bullish trend. However, failure to surpass $2,505 could enhance bearish momentum, pushing prices toward the 200-day moving average at $2,487.57. Traders should watch this area closely—rebounding from $2,487 could trigger a short-term rally, while a break below may lead to deeper sell-offs.

【Market Sentiment and Economic Background】

Investors are closely monitoring U.S. employment data to gauge the likelihood of the Federal Reserve's rate cut in September. Key data releases this week include ISM surveys, JOLTS job openings, ADP employment report, and non-farm payrolls. Expectations are high for the August non-farm payrolls, anticipated to add 165,000 jobs with the unemployment rate falling to 4.2%. Following Jerome Powell's recent comments at the Jackson Hole symposium, this employment data is crucial for assessing labor market conditions. The market largely expects the Fed to cut rates in September, though the extent—25 or 50 basis points—remains debated.

【Analyst Opinions】

Analyst James Hyerczyk from FXEmpire indicates tight positioning, with trend followers holding maximum long positions in gold. A weaker-than-expected non-farm payroll report might increase the chances of a 50 basis points rate cut in September, potentially boosting gold prices. FPMarkets' Aaron Hill notes that upcoming employment data will be pivotal in shaping the Fed's easing cycle. Additionally, the ongoing Israeli-Hamas tensions and central bank gold purchases are supporting gold prices, with some analysts predicting prices could approach $3,000/oz by year-end. However, traders should remain cautious of potential downside risks, including low physical demand in major Asian markets and tightly stretched gold positions. Bloomberg notes the "September Curse," where gold has historically underperformed, averaging a 3.2% decline since 2017. This seasonal trend could challenge gold's current bullish momentum. Despite the upward trend, analysts like Boris Mikanikrezai from FastMarkets suggest that summer defensive strategies might lead to September sell-offs, with a potential internal headwind from the traditionally strong U.S. dollar in September. Moreover, the latest economic data, including the PCE inflation report, may complicate the Fed's decisions, though the expectation of a September rate cut continues to underpin gold prices. The market is keenly awaiting U.S. labor data, which will significantly influence the Fed's monetary policy and, consequently, gold prices.