Gold Under Pressure, Still Remains Near Record Peak

Gold prices eased below $2,470 per ounce on Tuesday, but remained near record highs, supported by its safe appeal during heightened geopolitical tensions. Israeli military strikes on Khan Younis on Monday resulted in at least 18 deaths and numerous injuries. Additionally, Ukrainian forces breached the Russian border last Tuesday, advancing into western Kursk and exposing vulnerabilities in Russian border defenses. Investors are closely watching for US producer price data today and consumer price figures on Wednesday for further insights into inflation and indications about the Federal Reserve’s monetary policy. While expectations for a Fed rate cut in September remain intact, there is now debate over whether the reduction will be 50 basis points or a more modest 25 basis points. Lower interest rates generally increase the attractiveness of non-interest-bearing assets like gold.

In gold, the first support level is at 2,450. If this level is breached, the next supports to watch will be 2,430 and 2,412. On the upside, the initial resistance is at 2,475; if this level is surpassed, the next targets will be 2,450 and 2,500.