Gold Price Forecast: XAUUSD rally to reverse amid doubts Fed pivots early – TDS
Gold plunged down to support levels near $1,772, after the release of much stronger-than-expected US July payrolls data. In the view of strategists at TD Securities, the gold rally is ready for a significant reversal as traders are increasingly considering the possibility that the market has priced a premature Federal Reserve pivot away from its current hawkish stance.
There are plenty of inflationary pressures in the system
“There is a high probability that the recent rally, which took prices from a July low of $1,681 to a high near $1795, will be largely reversed as money managers reduce recently acquired long exposure.”
“The combination of hawkish statements from Fed officials and stronger-than-expected data are the likely catalysts which can trigger additional selling in the days and weeks ahead.”
“The US July CPI data on Wednesday, particularly the core, will be the one to watch as any hint of stubborn inflation pressures in the system should help to debunk the early pivot argument.”