The rise of the US dollar following the US Personal Consumption Expenditures (PCE) index for July has significantly impacted gold prices, driving them closer to the psychological level of $2500. Concerns regarding an economic slowdown in China, where gold demand is substantial, further complicate the outlook. Yet, expectations of a potential interest rate cut by the Federal Reserve in September could offer some support to gold by reducing opportunity costs associated with holding non-yielding assets.
As global economic indicators shift, the US Manufacturing PMI and the imminent employment data release will be critical in shaping market expectations. Investors are particularly focused on the upcoming Services PMI report, which may provide insights into the economy's health and influence gold prices, potentially stabilizing them if promising results emerge. However, the ongoing geopolitical tensions, especially in Israel, also play a crucial role in determining gold’s trajectory amidst rising market volatility.
#gold-prices #us-economy #china-economic-slowdown #geopolitical-tensions #interest-rate-expectations
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