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    Gold edges higher as focus turns to Fed Powell’s testimony

    July 9, 2024

    Key points

    • Spot gold increased by 0.2%, standing at $2,364.03 per ounce.
    • Investors focus on Fed Chair Jerome Powell’s testimony and upcoming inflation data.

    Gold prices experienced a slight uptick on Tuesday, reflecting cautious optimism among investors as they await critical economic updates. Spot gold rose by 0.2%, reaching $2,364.03 per ounce as of 0112 GMT.

    This increase comes after a more than 1% decline on Monday, highlighting the market’s sensitivity to upcoming Federal Reserve actions.

    Investors cautious ahead of Powell’s testimony

    The image displays a candlestick chart of the Gold (Symbol: XAUUSD-ECN) on a weekly timeframe, illustrating the price movement over a specific period. The trend shows a slight decrease of -0.10%, with an open price of 2331.66, a close price of 2329.43, a high of 2332.19, and a low of 2328.5. The chart includes several technical indicators: Moving Averages (MA) with periods of 5, 10, 20, and 30, which represent the average price over these timeframes. The volume bars at the bottom indicate the trading volume, showing the number of trades executed. Additionally, the MACD (Moving Average Convergence Divergence) indicator at the bottom assists in identifying changes in the strength, direction, momentum, and duration of a trend in the asset's price.

    See: Gold trading at 2361.91 on the VT Markets app.

    Spot gold prices moved up 0.2% to $2,364.03 per ounce, while U.S. gold futures firmed by 0.3%, standing at $2,369.70. This movement indicates a cautious but positive outlook among investors ahead of Federal Reserve Chair Jerome Powell’s testimony.

    Fed Chair’s testimony anticipated

    Investors are keenly awaiting Powell’s testimony before the Senate and the House, scheduled for later in the day and Wednesday, respectively. His comments could provide clearer insights into the Fed’s potential interest rate direction. Lower interest rates typically enhance the appeal of holding non-yielding bullion like gold.

    Also read: Gold rises as dollar weakens; attention turns to U.S. Fed minutes 

    Inflation expectations and economic indicators

    The path of U.S. inflation appears to be softening, as indicated by a Fed Bank of New York report. This report, released on Monday, noted a retreat in projections for price increases across a broad spectrum of consumer goods and services.

    The upcoming release of June’s consumer (CPI) and producer (PPI) price indexes on Thursday and Friday, respectively, will further inform market expectations.

    Recent labour market data showed the U.S. unemployment rate climbing to 4.1%, suggesting a cooling in the labour market. This data led to a more than 1% increase in bullion prices on Friday. In parallel, spot silver rose by 0.4% to $30.90, platinum edged higher by 1% to $1,006.20, and palladium gained 0.6% to $1,015.48.

    Investors will closely watch Powell’s testimony and the forthcoming inflation data. Any signals of a dovish stance from the Fed could further boost gold prices, while stronger-than-expected inflation data could temper gains.

    In summary, the market is navigating a period of heightened sensitivity to economic data and central bank signals, with gold and other precious metals poised to respond accordingly.

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