Gold is maintaining a short-term uptrend, with the price rising after a brief correction. The current target is the July 5 high. If the price consolidates above this level, the next bullish target will be within the upper Target Zone of 2451 - 2436.
Consider initiating long trades at strong support levels of 2342 - 2337 or 2317 - 2310. The first target for these trades may be the 2365 level.
The 10-year Treasury yield is back in the 4.25% to 4.30% area, anticipating a possible dip lower. The upcoming CPI report will be crucial, as it is expected to influence the direction of yields, especially considering service prices. Unlike the US, eurozone markets do not anticipate a rate-cutting cycle soon. The 2s10s Gilt curve has disinverted but may revert again in the near term.
A September Federal Reserve rate cut appears increasingly likely, given the ongoing progress in disinflation, emerging weaknesses in the labor market, and the relative tightening of the policy stance. Consequently, risk appetite should remain firm over the medium term, with equities likely continuing their upward trajectory.
The case for the FOMC to deliver a rate cut sooner rather than later is strengthening, based on three main factors:
1. Increased confidence in disinflation.
2. Signs of cracks emerging in the labor market.
3. A continued rise in the real fed funds rate.
Summary:
Gold is in a short-term uptrend, targeting the July 5 high and possibly reaching the upper Target Zone of 2451 - 2436 if consolidation occurs above this level. Long trades are recommended at strong support levels, with the first target at 2365. The 10-year Treasury yield is poised for a potential dip, influenced by the upcoming CPI report. A September Fed rate cut is becoming more likely due to disinflation, labor market issues, and an increasing real fed funds rate. Risk appetite remains strong, with equities expected to continue their upward movement.