Gold Falls As US Dollar Rises On Strong Core PCE Inflation.

Fundamental Analysis

* Golden Dilemma: The price of the yellow metal has fallen from its high as US Dollar’s recovery driven by elevated US core PCE inflation data, putting pressure on the value of gold. The annual underlying inflation data rose at a higher pace of 2.7% from the estimates of 2.6% but decelerated from 2.8% recorded in February. Stronger-than-expected figures dampen Gold’s allure by reducing the likelihood of Federal Reserve rate cuts in the upcoming September monetary policy meeting. The monthly underlying inflation data met expectations, remaining consistent with the previous reading of 0.3%. This scenario favors bond yields and the US Dollar.

Technical Analysis

* Technical Breakout: Gold price was traded lower following prior retracement from the resistance level 2335.00. MACD which illustrate diminishing bullish momentum signal suggest the commodity to likely extend its retracement.

* Resistance and Targets: If the bearish momentum persists, there’s a strong likelihood that the price will potentially head towards 2270.00. Conversely, a breach back above the level 2335.00 would suggest a trend continuation and potentially head towards 2400.50 level.

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Potential Risks

Looking ahead, investors will closely monitor upcoming data releases and the FOMC meeting scheduled for Wednesday. Recent US economic data indicating sustained inflationary pressures has fueled uncertainty regarding potential US Federal Reserve rate cuts in the near term. A hawkish sentiment could further reduce the attractiveness of non-yielding metals and put downward pressure on the price of gold.

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Monitoring

Stay updated on US data, Fed related updates and any shifts in the US Dollar’s strength by following PU Prime’s market insights and daily financial news.

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Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.