Gold prices keep trending upward, approaching $4,400 once again at the start of the week. What’s driving the precious metal higher? The same shift in market expectations regarding the Federal Reserve’s (Fed) future monetary path. A September rate hike looks increasingly unlikely following the release of the weak US employment report and moderate inflation readings. The dollar is now feeling the heat, making bullion more attractive to investors and boosting demand.
Let’s take a closer look at the US inflation report for July—another significant tailwind for gold. The data came in as expected, showing that consumer prices remain under control. This is especially important when paired with sluggish employment statistics. Given that July saw job losses and previous months’ figures were revised downward, these are clear signs of a cooling US labor market. The mentioned developments convinced traders that the Fed’s policy easing could be just around the corner. If this scenario unfolds, Treasury yields, the greenback, and the opportunity cost of holding gold will all decline.
From a technical standpoint, bullion prices managed to break through $4,300 and even settled above this critical resistance—another signal pointing to further upside. If bulls stay in the driver’s seat, the precious metal could climb to the next significant barrier at $4,500 per troy ounce.
The ultimate recommendation is to buy gold at the current price of $4,395, targeting $4,500 within one week. To mitigate the risk of adverse market movements, place a Stop Loss order at $4,300.
This content is for informational purposes only and is not intended to be investing advice.
