Gold Climbs as Fed Rate Cut Expected and Chinese Imports Rise

On Thursday, gold climbed above $2,510 per ounce, nearing record highs as expectations of Federal Reserve interest rate cuts continued to encourage the metal. Investors are awaiting further details on the scale of these cuts. Later today, the second estimate for Q2 GDP and the latest initial jobless claims will be released, with the PCE price index report, the Fed's preferred inflation gauge, due on Friday. According to the CME FedWatch Tool, traders are pricing in a 63.5% chance of a 25 basis point cut and a 36.5% chance of a 50 basis point reduction for the anticipated September rate cut. Markets are also anticipating a total of 100 basis points in rate cuts for the remainder of the year, which would lower the opportunity cost of holding non-interest-bearing assets. Additionally, official data showed that China’s net gold imports via Hong Kong rose by 17% in July, marking the first increase since March.

Technically the first support level is at 2,510. If this level is breached, the next supports to watch will be 2,495 and 2,470. On the upside, the initial resistance is at 2,525; if this level is surpassed, the next targets will be 2,550 and 2,585.