Gold Prices Remain in Range as Markets Expect Crucial Economic Information

Gold prices hover around $2,320 as traders await key economic data and Fed speeches. Geopolitical tensions and interest rate expectations influence the market. Technical analysis remains uncertain after a failed breakout attempt. Volatility expected in coming days.

The gold prices were trading near $2,320s on Tuesday as the traders showed some restraint before the key economic data and speech by the policymakers. The metal has been oscillating within the same range and now traders are looking for some new indications in order to take their positions.

Every one is waiting on the figure released Friday which is the Personal Consumption Expenditures (PCE) Price Index for May, which is the Federal Reserve’s preferred measure of inflation. This data could have a very strong effect on gold as it reacts to expectations of interest rates changing.

Another focal point will be speeches from the two members of the Federal Reserve, namely, Lisa Cook and Michelle Bowman who are expected to deliver speeches on Tuesday. These addresses may help them forecast the future rates of interest in the U. S. , a significant factor affecting the price of gold because of the cost of holding the barren asset.

Probability of an interest rate cut by the Federal Reserve by the time of the September meeting has increased to 67% compared to approximately 50% a week ago, as given by the CME FedWatch tool. Such a cut would likely be bullish for gold prices – in line with the experience witnessed from similar rate reductions in previous years.

Geopolitical issues remain in force and could help gold maintain its status as the ultimate safe-haven asset. Potential strikes, such as the one in France and UK which will be held in the next year, conflicts in the Middle East, and increasing tensions between Russia and the U. S. over the strike in Crimea are all threats to investor sentiment.

From a technical view, Gold has been forming confusing patterns, which leave analysts guessing about the direction of the gold price in the short term. A breakout above key resistances in the week ended last week did not hold out any sustained buying interest and price pulled back invalidating a bearish formation in the process.

Also Read: Gold goes up to the two week high due to the expectation of rate cut

Gold traders are still waiting for more movements in the next several days due to anticipated fluctuations in the markets as more data are released in the coming days.