With the Market Focused on Inflation Signals and a Sensitive Closing, Where Will Gold Go?
Gold prices continued to strengthen in today's trading, driven by growing expectations of monetary policy easing in the United States and cautious market sentiment ahead of the release of important economic data. Market participants highlighted the weakening of several US economic indicators, which indicate that inflationary pressures are easing, a situation that has fueled speculation that the Federal Reserve could signal a more dovish stance in the coming weeks.
Fundamentally, gold received support after the US dollar weakened and bond yields fell due to growing confidence that inflation is returning to the Fed's 2% target. If inflation and consumption data—particularly the PCE—show a slowdown, the market expects the opportunity for interest rate cuts to increase. This is a key catalyst for gold, given that this safe-haven asset is highly sensitive to changes in the benchmark interest rate.
However, pressure remains. If data released in the next few days indicates that inflation remains high or economic activity remains resilient, a strengthening dollar and rising bond yields could further hamper gold's progress. Investors are still monitoring global uncertainties such as geopolitical tensions, stock market performance, and global capital flows, which also influence sentiment toward precious metals.
Technically, gold is showing a bullish trend after holding above strong support in the US$4,135-US$4,160 area, which has served as a key resistance zone since the beginning of the week. Price gains are now heading towards the nearest resistance at US$4,130, before heading towards the intermediate resistance at US$4,150-US$4,165. If buying momentum is strong enough and the key resistance is broken, gold has the potential to open up wider upside heading into the weekend. Conversely, failure to break through resistance could trigger consolidation and return the price to that support area.
As the week draws to a close, the outlook for gold remains positive as long as pressure on the dollar persists and market sentiment remains cautious. Market participants are now awaiting the next policy direction from the Fed and developments in inflation data to determine gold's trend in the coming sessions. Gold is expected to remain volatile, but the opportunity for strengthening remains open if dovish signals again dominate the global market.
Source: Newsmaker.id
