Fundamental News and Triggers

• Gold skyrockets above $2400 as the falling US Inflation and 10-year Treasury bond yield increases Gold’s appeal. In the 12 months leading up to June, headline US inflation fell to 3%, down from 3.3%, while core inflation plummeted to 3.3%, below estimates and down from the previous month’s 3.4%.
• The CME FedWatch Tool predicts an 85% chance of a quarter-point rate cut in September, up from 70% on Wednesday, also acts as tailwind for the gold prices.
• One of the headwinds for the gold prices is that PBoC halted gold purchases in June, as it did in May. At the end of June, China held 72.80 million troy ounces of gold.

 

Technical Triggers

• Gold prices have continued their rapid rise and firmly broken the Head-and-Shoulders neckline, invalidating the chart pattern and paving the way for higher prices. The next resistance is the previous high of $2450 (Rs 74500).
• In July, dealers added around +20k SHFE lots to their net position, indicating increased Chinese demand in silver.

 

Support and Resistance

 

 

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