Gold continues to trade in a short-term downtrend, with the immediate target being the June 10 low. Should the price settle below this critical level, the next target for sellers will be the Gold Zone, which ranges from 2250 to 2245. Despite yesterday's news providing a slight upward push that saw gold retesting the 2330 zone, the overall trend remains bearish.
However, if the price manages to break above the June 12 high and consolidates above this level, we could witness a deep correction. In such a scenario, the correction could extend to the resistance zone of 2369 to 2361. This area marks the trend boundary, presenting another potential selling opportunity for traders.
Looking ahead, in ten days, a very subdued PCE deflator report is expected, which will likely reinforce the market's anticipation of a rate cut by the Federal Reserve in September. Treasury market participants are already factoring this in, as evidenced by the strong demand at the recent 20-year auction. While other economic data seem to support this outlook, there is a downside being overlooked, notably the -20 basis points term premium versus fiscal unknowns. However, this issue will be addressed at a later stage.
Traders should keep an eye on these key levels and market signals to navigate the current gold market trends effectively.