The price of Gold rallied this week on continued signals that Fed July rate cut is highly likely. Yesterday night Powell waves a rate cut and the same has confirmed by FOMC June minutes. Post the Powel testimony the consensus expectations have reached nearly 100.0%.

Nordea markets said, “we found that the FOMC minutes took a material dovish shift compared to May. This is also the conclusion from our new minutes-reading algorithm, which gave the most dovish sentiment score since 200”.
We expect the dollar index (KTM: USDX) to stay in the current range between 98.00-95.00$.

In commodities the price of Gold strengthened this week, so far as protracted buying triggered a break above of resistance at 1400$ confirming upside sentiment. Buying pressure has waned at the 80.0 fibs this morning in Asia session. In the near-term the trend is supportive, but the price needs to take out the double top level located at 1440$ to confirm trend once again.

Looking back to end of June and early July price action the price has struggled to hold above 1440$ and prompted a retracement back to its 20MA located around 1380$. The bears must take out key support at 1380$ to set the scene for a retracement.

Looking the day ahead, the ECB minutes and US CPI figures will release today.

Danske bank said “Markets will look out for clues in the minutes on how ready the GC stands in announcing immediate steps already at the 25 July meeting. We still lean towards an announcement of an easing package coming in September”.

At the time of preparing this, the dollar index holds the 20MA whereas the EURUSD facing resistance at 20MA.

It is important to always keep in mind the risks involved in trading with leveraged instruments.

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