• Gold prices soared to a new all-time high of over $2530 per ounce on Tuesday, bolstered by bets on less restrictive monetary policy from major central banks amid ongoing geopolitical concerns.
• Simultaneously, signs of continued deflation in the United States, evident in the slower-than-expected deceleration of both headline and core price indices in July, have increased expectations that the Federal Reserve will begin cutting US interest rates and paying attention to the slowing labor market.

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At present, financial markets are favoring a 100-basis point rate cut by the US central bank in its three remaining decisions this year. Less restrictive monetary policy expectations were also present at other major central banks, reducing the opportunity cost for global investors to hold non-interest-bearing bullion assets.

Separately, the Swedish central bank cut its benchmark interest rate and indicated several more cuts this year, while the People's Bank of China made unexpected cuts, leaving personal loan rates at record lows amid China's slowing growth. Also, the European Central Bank and the Bank of England have cut interest rates and are set to make further cuts.

As for the factors affecting the gold market, the US dollar is hovering at its lowest levels in more than seven months. The US dollar index DXY settled below the 102 supports on Tuesday after falling for two consecutive sessions, hovering at its weakest levels in more than seven months amid strong expectations that the Federal Reserve will start cutting US interest rates soon. Also, investors prepared for Fed Chairman Jerome Powell’s speech in Jackson Hole, Wyoming, on Friday for clues on whether the central bank will cut rates by 25 or 50 basis points in September. Moreover, the latest minutes from the Federal Open Market Committee (FOMC) due later this week could provide further clarity as well. Currently, markets are pricing in close to 100 basis points of aggregate easing this year.

Meanwhile, Minneapolis Fed President Neel Kashkari said on Monday that it is appropriate to consider a rate cut in September due to rising risks to the labor market. San Francisco Fed President Mary Daly and Chicago Fed President Austan Goolsbee shared similar sentiments in separate statements, suggesting a move is imminent next month.

Another factor weighing on the gold market, the yield on the 10-year U.S. Treasury note held steady at around 3.88% on Tuesday as investors avoided making big bets ahead of Fed Chair Jerome Powell’s speech at the Jackson Hole symposium on Friday. Traders also awaited the latest minutes of the Federal Open Market Committee on Wednesday for more clarity on the path of monetary policy. The central bank is widely expected to begin cutting rates in September, but markets remain divided on whether the Fed will deliver a 25 or 50 basis point cut. concurrently, markets are expecting close to 100 basis points in total easing this year.
 

Gold Price Forecast and Analysis Today:

There is no change in our technical view of the performance of the gold price, as the general trend is strongly upward. Technically, its gains by exceeding the historical resistance of $2500 per ounce are important to confirm the strength of bulls’ control over the trend. At the same time, technical indicators are moving towards strong buying saturation levels. According to the free trading recommendations page, we indicated the possibility of selling gold from the resistance of $2535 per ounce. Furthermore, its gains stopped at $2531 per ounce before quickly falling back to the level of $2500 per ounce, which confirms the strength of the recommendation. The gold price is stable around $2515 per ounce at the time of writing the analysis, pending strong indications about the future of interest rates next month.

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