Fundamental News and Triggers

• Precious metals saw broad-based selling as it fell prey to deleveraging across financial markets. A worsened risk-off sentiment continues to impact traders, as worries of a US recession sparked a sell-off in the major stock market indices.
• The Federal Reserve is expected to lower interest rates by 50 basis points at its September meeting, following two negative economic reports. The CME Fed Watch tool indicates the likelihood of a 50-bps Fed rate drop at the September meeting at 85%.
• Recent US statistics revealed indications of a weakening manufacturing sector and a decreased demand for workforce. The US Unemployment Rate reached its highest level since November 2021 at 4.3%, while the Manufacturing PMI for July contracted at a faster rate to 46.8.
• Increasing Middle East tensions capped bullion losses as Israel awaits a response from Iran and Lebanon following the assassination of the Hamas leader earlier in the week. It was revealed that a US base in Iraq was targeted by several missiles.

 

Technical Triggers

• Gold is showing very wild moves from the last few days, with a swing of $100 in a day. Buy on dips and sell on rallies should be the strategy used. $2350 (`Rs 68000) and $2400 (`Rs 69000) remain very strong support and $2500 (`Rs 71000) is very strong resistance.

 

Support and Resistance

 

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