US Rate Cut Expectations Push Gold to $2,400

Gold strengthened to around $2,400 per ounce on Thursday, recovering losses from the previous session amid expectations of US interest rate cuts and ongoing assessments of recession fears. The recent weak US jobs report has led traders to predict nearly 105 basis points of rate cuts by the Federal Reserve by year-end, with markets fully pricing in a rate cut for September, according to the CME FedWatch Tool. Lower interest rates increase the appeal of non-interest-bearing precious metals like gold. Investors are now awaiting Thursday’s jobless claims to determine whether economic data, particularly employment figures, is indeed slowing down. At the same time, the risk of escalation in the Middle East conflict continues to support upward momentum for bullion. Additionally, official data released on Wednesday indicated that the People’s Bank of China did not add to its gold reserves for the third consecutive month in July.

Gold starts the day in a sideways trend, with the first support level at 2,387. If this level is breached, the next supports to watch will be 2,375 and 2,355. On the upside, the initial resistance is at 2,400; if this level is surpassed, the next targets will be 2,430 and 2,450.