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Gold prices are trading in a range today and remained near their highs. While fundamentals could remain supportive, new catalysts could help the asset teach new highs.
The U.S. dollar and treasury yields stabilised to certain extent consequently limiting gold intraday upside potential. However, this stability could be short-lived, due to the incoming new US economic data this week.
Throughout the week, the focus will shift to the preliminary U.S. GDP figures for Q2 and the PCE Price Index data. These figures could provide further clarification leading to the Fed’s decision to cut interest rates next month. Depending on the magnitude of the expected rate cut, gold could face volatility.
The long-term fundamentals for gold remain supportive. Last week, Federal Reserve Chair Jerome Powell confirmed an interest rate cut for September, with several Fed members echoing this dovish outlook. Concerns about economic growth in various economies also support gold’s appeal as a hedge. Furthermore, rising geopolitical tensions in the Middle East continue to drive demand for safe-haven assets like gold. Fears of further escalations may continue to keep gold prices on an upward path.
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