Gold rose 0.05% to 59790 Wednesday as the dollar index reclaimed the 100-point threshold, as investors assessed the outlook for Federal Reserve monetary policy. Recent economic data has reignited optimism that the United States Federal Reserve may soon pause its interest rate hike cycle. On July 26, the Fed will raise its benchmark overnight interest rate by 25 basis points, with most economists expecting this to be the final hike of the current tightening cycle.

Traders also examined data showing that US retail sales growth in June fell short of predictions, but consumer spending in other areas remained resilient. Yet, the dollar has remained near its lowest levels in almost a year as a result of lowering US inflation, raising hopes that the Federal Reserve is nearing the conclusion of its current monetary tightening cycle. The central bank is largely expected to hike interest rates by 25 basis points this month, signaling the end of their tightening measures. After dovish comments from several ECB officials, the euro rose from a 17-month low against the US dollar to $1.122. The yen fell toward $140 as Bank of Japan Governor Ueda underlined his commitment to continuing ultra-easy monetary policy.
Technically, the market is under short covering, as open interest has dropped by -7.69% to end at 8016, while prices are up 27 rupees. Gold is currently gaining support at 59626, and a move below may see prices testing 59461 levels, while a move above could see prices testing 60043.

By Deesha

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