Gold Rises to $2,375, Yen Steady Before BoJ Meeting (07.26.2024)

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Gold climbed to around $2,375 per ounce on Friday, recovering from a more than 1% drop in the previous session with better US economic data, and awaited the PCE inflation report later today. Thursday's data revealed that US GDP grew at an annualized rate of 2.8% in the second quarter, surpassing market expectations of 2% and up from 1.4% in the previous period. Despite this, predictions for rate cuts remained unchanged, with markets fully pricing in a reduction at the Federal Reserve's September meeting with two additional cuts by year-end. For the week, gold is on track to decline, facing losses two weeks in a row.

The Japanese yen held steady at around 153.60 per dollar on Friday after reaching a 12-week high of 151.95 in the previous session. Bank of Japan will have a policy meeting next week, which might include a potential rate hike. Data showing Tokyo's core inflation rate accelerating for the third month in July supported the case for further policy normalization by the BoJ. The central bank is expected to announce plans to reduce its bond purchases next week as part of efforts to grow its extensive monetary stimulus. The yen is set to gain over 2% this week, marking its best performance in nearly three months, as traders unwound long-held carry and short positions against the currency. Additionally, the yen benefitted from safe-haven buying as global equities experienced recent sell-offs.

The dollar index held steady around 104.3 on Friday after recent volatility, as traders awaited the latest PCE price index report. On Thursday, preliminary data showed the US economy grew by 2.8% in the second quarter, driven by increased consumer demand, though still below the 2021-2023 average of 3.1%. Price pressures eased in the last quarter, and initial jobless claims were roughly as forecasted. While the dollar remained stable against most major currencies, it faced pressure against the yen with expectations of a Bank of Japan rate hike next week.

EUR/USD Rises Ahead of US PCE Data

Before the release of the US PCE data, the EUR/USD pair began the day on an upward trend. The first resistance level is at 1.0870; if this is breached, traders should watch subsequent resistance levels at 1.0900 and 1.0950. On the downside, the initial support level stands at 1.0810, with further support at 1.0760 and 1.0710 if the pair declines further.

USD/JPY Reacts in Asian Session, Resistance at 154.70

The USD/JPY pair began the day with notable activity during the Asian session. The initial resistance level is set at 154.70, with further resistances to monitor at 155.50 and 156.00. On the downside, the first support level is at 153.00, followed by additional supports at 152.00 and 151.15 if the pair continues to decline.Bottom of Form

Gold Trades Sideways, Key Resistance at $2,375

Gold began the day with sideways movement, encountering its first resistance at $2,375 per ounce. If the price surpasses this level, the next targets are $2,385 and $2,415. On the downside, the initial support level is at $2,370. Should this level be breached, further support levels to watch are $2,355 and $2,315.

GBP/USD Eyes New Territory

For the GBP/USD pair, the initial support is at 1.2850, followed by additional support levels at 1.2820 and 1.2760. On the upside, the first resistance is at 1.2880. If the pair breaks above this resistance, the next levels to watch are 1.2910 and 1.2950.