$2500 acts as strong support

Fundamental News and Triggers

  • The gold price has recovered from $2500 after the critical US CPI report prompted investors to lower their expectations of a greater, 50-basis-point interest rate decrease by the Federal Reserve next week.
  • According to the US Bureau of Labor Statistics, the headline CPI increased 0.2% in August, however, the annual rate fell more than expected, from 2.9% to 2.5%, the weakest increase since February 2021.
  • According to the CME Group’s FedWatch tool, the markets are now pricing in an 87% likelihood of a 25 basis point rate drop at the next FOMC policy meeting on September 17-18, compared to 71% before the US CPI data.
  • US Treasury bond rates are rising as the chances of a more aggressive policy easing by the US central bank decrease.

 

Technical Triggers

  • If Gold breaks its previous high of $2530, we could see new highs of $2550 (~Rs 73000) and $2600 (~Rs 75000) in the short term. While on the downside, if $2470 is broken, we might see profit-booking up to $2430 (~Rs 70000) and $2400 (~Rs 69000).
  • Silver is gradually recovering from very important support of $28 (Rs 82500) and heading towards its resistance zone around $30.5 (Rs 88000).

 

Support and Resistance

 

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