Gold shows stability around $1915.00
Key resistance at $1930.00 for gold
Expectations of ongoing US dollar interest rate hikes
Powell commits to tightening monetary policies for inflation control
Markets await this week's US labor market data
Significant economic events impacting the movements of the US dollar
After concluding the previous week with a decline, the precious metal initiated the current week displaying notable stability. This stability is underpinned by the strength of the US dollar in relation to major currencies and commodities, and it is further fueled by the anticipation of continued interest rate hikes. This sentiment has been amplified following statements made by Federal Reserve Chair Jerome Powell.
During the Jackson Hole Symposium held in the US, Powell articulated that the reduction of inflation rates might necessitate more flexible labor markets. Additionally, achieving the bank's targeted inflation levels could require a lower-than-usual growth trajectory. Powell emphatically reiterated the Federal Reserve's commitment to closely monitor consumer price inflation, even in the face of elevated food and energy prices.
The Federal Reserve has made it clear that it intends to persist with its tightening of monetary policies to rein in inflation rates.
The financial markets are eagerly anticipating the release of several key economic data points throughout this week. These include US labor market data and the Consumer Spending Index, both of which are favored indicators of inflation trends for the Federal Reserve.
In terms of trading, the precious metal embarked on the current week with a modest increase, trading in proximity to the $1916 level.
Crucial technical levels impacting gold trends
Following an attempt to breach the resistance at $1925.00, which proved unsuccessful, gold has undergone a retreat and is presently trading in the vicinity of the $1915.00 mark. There exists a likelihood that this corrective phase might continue, prompting a test of the $1900.00 threshold. A breach of this level could potentially trigger additional downward momentum, directing the trajectory towards the established support level at $1885.00.
Gold should manage to surge from its current position and successfully surpass the resistance barrier at $1925/$1930, such an achievement could contribute to a heightened upward movement. This scenario would involve the exploration of resistance points, notably at $1945.00. Overcoming this obstacle might propel the ongoing upward trend towards the target level of $1960.00.