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Gold Holds Above $2,310 An Ounce Ahead of Important U.S. Inflation Data

28 Jun,2024
Gold Holds Above $2,310 An Ounce Ahead of Important U.S. Inflation Data

Gold prices fell at a slight pace in Asian transactions on Friday, and investors are still keen to acquire the U.S. dollar ahead of the main inflation data, which is likely to affect interest rates.

- The yellow metal regained some of its strength on Thursday after it decreased to the support level of $2,300 an ounce earlier this week. 

- The spot price of gold decreased by 0.3 % to $2,320.39 an ounce, while gold futures for ends in August by 0.3 % to $2,330.85 an ounce. The instant prices for June also decreased, although it was prepared to make some gains during the second quarter.

- The yellow metal adheres to a limited trading scope during June, amid increased uncertainty on the U.S. interest rate cut. Although the U.S. economy slows down the recent economic data, Federal Reserve officials warned that stubborn inflation may postpone any plans to reduce interest rates.

- To this end, the focus is directly on the data of the Personal Consumption Expenses (PCE) Index on Friday. It is the preferred inflation scale of the Federal Reserve, and expectations indicate that inflation is still much higher than the annual central bank of 2%. 

- The continued interest rates are high as a negative gold scenario, given that it increases the cost of an alternative opportunity to invest in the non-yielding assets.

- On the other hand, silver futures increased by 0.2 % to $ 29.328 an ounce.

- The expectations for reducing interest rates stimulated some gains in the metal markets during the second quarter of 2024. However, traders reduced the largest part of these expectations during the month of June, which in turn witnessed most of the minerals abandoning their quarterly gains.

Gold's Technical Analysis 

- The yellow metal was able to break out above $ 2,300 yesterday and bounced from the $2,294 mark. If gold succeeds in breaking out $2,330, it may target $2,345 as the first resistance target, $2365 second target, and $2,384. The failure of gold prices to break out the resistance level of $2,330 means the possibility of declining and re-testing the price for the demand zone between $2,310 and $2,300 per ounce.

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