Gold prices hit an all-time high on Thursday after falling for the past five days. Prices were down compared to the previous quarter. The increase in US Treasury yields after the release of data in the United States (US) strengthened the dollar and weighed on the gold metal.
Data from the US Bureau of Labor Statistics (BLS) showed that the number of Americans applying for unemployment benefits is higher than previous estimates and statistics. Other data showed that Business Activity remains solid, even though manufacturing activity contracted for the second straight month, according to SandP Global.
Bullion traders digested the Federal Open Market Committee’s (FOMC) last meeting Minutes, released on Wednesday, which surprisingly showed that the “vast majority” of FOMC participants supported the case to ease policy at the September meeting if data met expectations.
The Minutes showed that policymakers had grown confident that inflation risks are skewed to the downside, while risks of achieving maximum employment had risen.
Boston Fed President Susan Collins echoed some of those views, commenting that the labor market is healthy and adding that it would be appropriate to lower interest rates soon. Recently, Philadelphia Fed Patrick Harker agreed with Collins on easing policy but added that the Fed should be methodical in cutting interest rates.
For background, investors are preparing for Federal Reserve Chairman Jerome Powell’s opening speech in Jackson Hole. He is expected to set the stage for monetary policy in the second half of 2024.
The US jobless number rose to 232,000 in the week ended August 17 , beating expectations of 230,000 and 228,000 the previous week. The SandP Global Manufacturing PMI also fell to 48.0. The services PMI came in at 55.2, beating estimates. As expected, US home sales rose 1.3% in August to 3.95 million from 3.9 million. Attention will turn to Fed Chairman Jerome Powell’s speech at the Jackson Hole Economic Symposium, and expectations of signs that gold prices will rise.
Fed officials have backed a potential rate cut last month, lowering the opportunity cost of holding gold.
Technical Outlook of Gold Prices
Gold prices witnessed nearly one percent drop yesterday. Prices retreated from the day’s high 71884 and made a low 70894, before settling at 71194.
On the above chart, prices turned lower from the massive hurdle of 72300 and formed a long bearish candle stick, which is indicating for more weakness in near future.
However, prices would need to break below 70880 in order to drop towards 70100-69200. On the upside, massive resistance is seen at 72320 and a break above will open the door for next resistance 72650-73100.
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Commodity Samachar
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