Expectations of a Fed rate cut are rising, gold prices continue to rebound, waiting for non-agricultural data to be released
2025-07-02 14:25:29
Spot gold (XAU/USD) traded below a one-week high in the Asian session on Wednesday, maintaining a range-bound trend. In the previous two days, gold prices rebounded from a near one-month low, recording a significant weekly gain. However, the slight recovery of the US dollar from a three-and-a-half-year low and the improvement of market risk sentiment have limited gold prices in the short term.
The US dollar rebounded moderately but was limited, and the probability of the Fed cutting interest rates continued to rise. The market has basically digested the expectation that the Fed will start a rate cut cycle in the second half of the year, especially in the context of the recent continued contraction of the US manufacturing industry, the rebound in job vacancies, but the weakness of the job market. According to the CME FedWatch tool, the market's probability of a 25 basis point rate cut in September is close to 75%.
Fed Governors Michelle Bowman and Christopher Waller both hinted a rate cut could come as soon as July.
Federal Reserve Chairman Powell pointed out that "if it weren't for the Trump administration's uncertain trade policy, the Fed would have started easing measures earlier." He said whether to cut interest rates in July still depends on the performance of economic data.
Trade uncertainty has re-intensified, boosting safe-haven demand. Trump recently said that he might impose higher tariffs on Japanese imports because Japan is unwilling to buy American rice. This statement has exacerbated market concerns that more trade frictions may occur before the July 9 deadline for "reciprocal tariffs."
Gold prices are currently at a critical turning point, and short-term bulls need to break through the resistance range of $3355 to $3358 to open up further room for growth. Once it breaks through, gold prices are expected to test the $3400 round mark and even extend to the $3415 to $3450 area.
On the contrary, if the gold price falls below the support area of $3329 to $3328, the support below is located at $3300, $3276 and $3245 (this week's low). If $3245 is lost, the gold price may quickly fall to the $3210 to $3175 area.
Editor's comments:
The current gold price is in a consolidation phase under the influence of "policy game" and "geopolitical risk". The market pricing of the Fed's upcoming interest rate cut and trade policy uncertainty support the gold price, while the short-term rebound of the US dollar and the recovery of risk appetite limit the rise of gold.
Whether the technical level of $3,358 can be broken will determine whether gold will start a new round of rise or fall into a high-level shock pattern. Pay attention to whether the US non-farm data on Thursday will become a catalyst for the direction of gold prices.
The US dollar rebounded moderately but was limited, and the probability of the Fed cutting interest rates continued to rise. The market has basically digested the expectation that the Fed will start a rate cut cycle in the second half of the year, especially in the context of the recent continued contraction of the US manufacturing industry, the rebound in job vacancies, but the weakness of the job market. According to the CME FedWatch tool, the market's probability of a 25 basis point rate cut in September is close to 75%.
Fed Governors Michelle Bowman and Christopher Waller both hinted a rate cut could come as soon as July.
Federal Reserve Chairman Powell pointed out that "if it weren't for the Trump administration's uncertain trade policy, the Fed would have started easing measures earlier." He said whether to cut interest rates in July still depends on the performance of economic data.
Trade uncertainty has re-intensified, boosting safe-haven demand. Trump recently said that he might impose higher tariffs on Japanese imports because Japan is unwilling to buy American rice. This statement has exacerbated market concerns that more trade frictions may occur before the July 9 deadline for "reciprocal tariffs."
Gold prices are currently at a critical turning point, and short-term bulls need to break through the resistance range of $3355 to $3358 to open up further room for growth. Once it breaks through, gold prices are expected to test the $3400 round mark and even extend to the $3415 to $3450 area.
On the contrary, if the gold price falls below the support area of $3329 to $3328, the support below is located at $3300, $3276 and $3245 (this week's low). If $3245 is lost, the gold price may quickly fall to the $3210 to $3175 area.
Editor's comments:
The current gold price is in a consolidation phase under the influence of "policy game" and "geopolitical risk". The market pricing of the Fed's upcoming interest rate cut and trade policy uncertainty support the gold price, while the short-term rebound of the US dollar and the recovery of risk appetite limit the rise of gold.
Whether the technical level of $3,358 can be broken will determine whether gold will start a new round of rise or fall into a high-level shock pattern. Pay attention to whether the US non-farm data on Thursday will become a catalyst for the direction of gold prices.
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