Gold might trade with a bearish bias next week as short-term macro headwinds persist

economictimes.indiatimes.com:

COMEX Gold prices started the week on a negative note as mixed data from the US coupled with weak economic data from the European peers bolstered the greenback. US Services activity slowed more than forecast in July, however, manufacturing activity rebounded to a three-month high. At the same time, European and UK Services activity eased to a six-month low, leading to weakness in the Euro and Pound.

Dollar index started easing on Tuesday amid Chinese optimism and ahead of the FOMC meeting, which led to a recovery in gold prices during the first half of the week. China pledged to ramp up policy support for its flagging economy, with a focus on boosting domestic demand and helping the ailing property market. The US Fed policy outcome was mostly in line with expectations.

During the July FOMC meeting, the Federal Reserve raised the target range for the federal funds rate by 25 bps to 5.25% — 5.5%, bringing borrowing costs to the highest level since January 2001. The yield on the US 10-year Treasury note eased toward the 3.85% level, while the dollar index slipped towards 101 levels, as Fed chair Jerome Powell’s comments were perceived as leaning more towards the dovish side. The US Fed Chair Powell insisted that the central bank would take a “data-dependent” approach going forward when determining additional hikes and clarified that no decision to raise borrowing costs further has been made.

The US Fed refrained from explicitly stating that borrowing costs are sufficiently restrictive, suggesting that another rate hike may be on the table in upcoming meetings. Still, swaps were not pricing in another September rate hike, amid signs of cooling inflation. The major reversal in gold prices came on Thursday, after a slew of