Gold was trading high in the New York session yesterday around the $2,351 price level as the US economic data report GDP and "Initial Jobless Claims" were reported to have declined.
Market sentiment currently expects a 50% probability that the Fed will keep interest rates on hold at the September FOMC meeting and a 64% probability that the Fed will cut interest rates at the November 2024 FOMC meeting.
Today market players will be focused on the American inflation indicator report which is "Core PCE Inflation Data". Tonight's data report should be the deciding point for the price of gold whether it remains "Bullish" or otherwise.
The Impact of Core PCE Inflation Data on Gold
Previous Reading Expectation Data
Core Personal Consumption Expenditures – Price Index (MoM) (Apr)
0.30% 0.30%
Core Personal Consumption Expenditures – Price Index (YoY) (Apr)
2.80% 2.80%
Any increase in the data above the previous reading, i.e. an increase in the inflation reading from before, can provide a strong factor for the Fed to maintain the existing interest rate for longer.
It can simultaneously provide a strong boost to the American Dollar currency and is also able to push the price of gold to a lower level.
However, if the inflation reading tonight is seen to decrease, it indirectly interprets that a re-evaluation of the implementation of interest rates can be done at the same time as being able to push up the price of gold.
Technical Analysis
The Core PCE inflation data report tonight is capable of pushing gold prices lower to the $2,300 level if tonight's data shows an increase in inflation readings.
But if on the contrary, the price level of $2,376 can be reached if the inflation data report tonight records a decrease compared to the previous data.
Gold is expected to trade "Consolidation" between the price level of $2,335 and $2,353 before the release of the inflation data report tonight.
