"Gold has just rebounded from around $3,717/oz after a healthy correction, following a strong rally that pushed prices toward a new high near $3,790/oz. This pullback mainly reflects profit-taking after the extended uptrend and growing investor caution as the balance of U.S. macro data this week tilted toward "moderately positive." New Home Sales came in at 800K (well above the 650K forecast and higher than the previous 664K), while Q2 GDP was revised up to 3.8%, indicating stronger-than-expected growth."
"The next focal point is Core PCE-the Fed's preferred inflation gauge. Inflation alone can exert opposing forces on gold. If PCE eases further, expectations of monetary easing would be reinforced, real yields would trend lower, and in principle this would be supportive for gold. Conversely, if inflation cools while growth remains solid, capital may rotate toward risk assets (equities, credit), reducing safe-haven demand in the short term and putting deeper corrective pressure on gold."
Gold rebounded from about $3,717/oz after a correction following a rally toward $3,790/oz. The pullback reflected profit-taking and rising investor caution as U.S. macro prints tilted moderately positive, including 800K New Home Sales and a Q2 GDP revision to 3.8%, which strengthened the USD and cooled safe-haven flows. Core PCE will be pivotal: falling PCE would lower real yields and support gold, while cooling inflation alongside solid growth could shift capital into risk assets and deepen a correction. Upside PCE surprises would lift USD and real yields, pressuring gold. Strategic central bank buying and returning ETF inflows underpin structural demand amid constrained mine supply and rising costs.
Read at London Business News | Londonlovesbusiness.com
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