Gold: Triple Top or Moving Forward?
After the troy ounce of gold once again returned to the 2460-2470 level, several important questions arise. We have already seen this level twice before, and now the interest lies in what comes next. The main questions that concern investors are:
What’s next?
How long will we stay at the current level?
Is this a trend reversal?
Current Situation
Let's start with the most pressing question: no, this is not a trend reversal. The belief in an upward trend for gold remains. Central banks continue to buy gold, maintaining stable demand for this precious metal.
Reasons for Pullbacks
Every time gold reaches the current price level, we see a significant pullback. This raises questions for many market participants. In our view, this is simply a coincidence of various factors such as mini-trends in the market and geopolitical events.
Possible Scenarios
Can we expect another pullback to the 2380-2400 level? Technical analysts might say that a triple top has formed. However, current factors and conditions suggest a potential breakout upwards.
Currency Market and Inflation
The US dollar continues to decline relative to other major currencies. The DXY index is likely to break the 103 level. The EUR/USD pair is approaching the 1.10 mark. A weaker dollar is a positive factor for gold.
Today, the US Consumer Price Index (CPI) will be released. Yesterday's Producer Price Index (PPI) showed that inflation is steadily declining. This means the Federal Reserve has virtually no arguments for maintaining high rates. The probability of the first rate cut in September is very high. We may see several rate cuts this year, which is also a positive factor for gold.
Expectations and Forecasts
So, we are awaiting the inflation data. The forecast is at 3.0%. If the actual figures are slightly lower, we may see the following:
A drop in the dollar,
A rise in bond prices,
A confident breakout in gold prices to the 2480-2500 level.
The wait won't be long.
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