Gold prices are holding steady above the $1,920 level and are looking for another push towards the August highs above $2,000. Prices have dipped slightly over the last two days after hopes for a second U.S. stimulus faded.
A strong commodities rally in July was spurred by fears over debt and spending in the U.S. after increased Federal Reserve stimulus and initial talk of another round of stimulus for the world’s largest economy. President Trump agreed to a $1.8 trillion deal this week, however, Democrats have dug their heels in over their planned $2.2 trillion package.
Today’s inflation figures from the U.S. could be a driver for gold and analysts are expecting a print of 1.4% after last month’s 1.3% figure. If the number comes in higher than expected then gold should get the buyers needed for another push to recent highs. According to Federal Reserve data, 5yr inflation expectations are for 1.9%.
Despite the large increase in the Federal Reserve balance sheet, most investors are still cool on inflation expectations in the U.S., whilst others are predicting runaway inflation down the line. A stronger inflation print could see those fears intensify.
Gold Price Technical Outlook
Gold on the weekly chart showed two strong weeks from the channel support and this sets up for potential gains. There is some resistance ahead of $2,000 which is the ultimate target ahead of the August highs at $2,075. The Investing Cube team is currently available to assist with trading in currencies with the Forex Trading Course or through one-to-one coaching.
Gold Price Weekly Chart