Fed Rate Cut Expectations and Economic Data Impact on Gold Prices
On the U.S. front, growing anticipation surrounds the possibility of the Federal Reserve lowering interest rates in September. Fed Chair Jerome Powell has hinted that it may be time for policy adjustments, which the market has interpreted as a signal for potential rate cuts. The July FOMC Minutes reveal that most Fed officials are in favor of a rate cut next month, provided there are no unexpected economic disruptions.
Philadelphia Fed President Patrick Harker has also expressed support for two or three rate cuts in 2024, while Chicago Fed President Austan Goolsbee noted that the current monetary policy is highly restrictive, with a shift in focus toward employment goals.
Despite these expectations, gold is under pressure due to a risk-on market sentiment. However, upcoming economic data releases could alter this trend, especially if they point to economic weakness.
Key reports to watch this week include July’s Durable Goods Orders on Monday, the preliminary U.S. GDP for Q2 on Thursday, and the PCE Price Index for July on Friday.
Short-Term Forecast
Gold prices may see continued downward pressure if the $2,516 resistance holds. A break below $2,500 could signal further declines, targeting $2,486 support.