Gold limps into the weekend on hot US data
- Gold down almost 2% week-to-date
- Precious metal weighed by rising bond yields and dollar
- Trump-Putin summit may influence near term outlook
- Jackson Hole, US data could spark more volatility next week
- Technical levels: $3300
Gold is headed for a weekly loss of almost 2% after traders shaved Fed cut bets following a pick-up in wholesale inflation.
The precious metal collapsed like a house of cards on Thursday after US wholesale inflation accelerated in July by the most in three years. Bond yields and the dollar jumped as the odds of a September cut slipped to around 90%. Beyond September, traders are pricing in a 52% chance of another cut by October.
Although gold prices stabilized on Friday, more pain could be around the corner depending on how the summit between Trump and Putin in Alaska plays out. Trump has already warned of severe consequences if Putin fails to agree to a Ukrainian ceasefire agreement.
Should the talks conclude on a positive note and raise hopes for an end to the war in Ukraine, this may drag gold lower as risk appetite rises. However, if the talks end on a sour note – gold may rise on renewed geopolitical risk.
Looking at the week ahead, the annual Jackson Hole Economic Symposium and key US data may influence gold prices. The spotlight shines on Jerome Powell on Friday amid repeated comments from Trump to cut interest rates.
Looking at the charts, prices are under pressure with key support at $3330.
- A solid break below this point may open a path toward $3300.
- Should $3300 prove reliable support, prices may rebound back toward $3350 and $3370.
