After posting gains for the previous two weeks, the price of gold slightly fell last week. Investors began to reevaluate the possibility of a soft landing and the expectation that the Federal Reserve would raise its policy rate one more time before the end of the year as macroeconomic data releases from the US indicated a relatively healthy economic activity.
Concerns that the Federal Reserve will have more motivation to keep rates high increased
after strong readings on jobless claims and service sector prices were released earlier last
week. While it is anticipated that the central bank will maintain rates at over 20-year highs
later this month, it is also anticipated that it will largely stick to its hawkish messaging in the
face of sticky inflation and a robust labour market.
The highlight of this week will be the US August CPI data on Wednesday. The market’s
immediate response to the CPI data might be simple. A higher-than-expected monthly
reading may encourage hawkish Fed bets and weigh down on gold, whereas a lower-thanexpected reading may have the opposite effect and aid in the pair’s recovery.
The yield on US Treasury bonds with a ten-year maturity increased for four months in a row,
increasing by almost 20% from May to September. Even though the US economy
outperformed other major economies, worries about a global economic slowdown have
grown in the interim.
The next targets for the bears could be Rs. 58300 and Rs. 58000 if the price of gold falls below
Rs. 58800 and begins to encounter that level as resistance. Before the Rs 59600 barrier, Rs
59200 is aligned as immediate resistance on the upside. To help Gold reach its next target of
Rs. 60000, a daily close above that level might attract more buyers.
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