Gold's slight recovery to resume downtrend

On Thursday, gold prices remained close to their lowest point in a month. Investors were preparing for the crucial U.S. inflation data that could significantly influence the Federal Reserve's decisions regarding interest rates in the near future.

XAUUSD BUY 1916 -1918💯💯

✅ TP1: 1922
✅ TP2: 1927

🛑 SL: 1912

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The price of spot gold remained unchanged at $1,916.19 per ounce as of 0123 GMT, just a few dollars above its recent low point since July 10th, which was reached on Wednesday. Gold futures in the U.S. experienced a slight decrease of 0.1%, trading at $1,948.90.

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In July, China's consumer sector entered a state of deflation due to challenges in stimulating demand, increasing the pressure on Beijing to implement additional direct policy measures.

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XAUUSD SELL 1925 -1927💯💯

✅ TP1: 1921
✅ TP2: 1916

🛑 SL: 1931

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Anticipated data on the U.S. Consumer Price Index (CPI), scheduled for later today, is expected to reveal a slight acceleration in inflation for the month of July.

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While gold is commonly viewed as a safeguard against inflation, the increase in interest rates elevates the potential expense of holding onto non-interest-bearing gold.

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Bond strategists surveyed by Reuters predict that U.S. Treasury yields will decline in the upcoming months, despite the Federal Reserve showing clear indications of hesitance towards implementing rate cuts in the near future. These strategists also forecast that the 10-year yield will not reach its previous cycle peak again.

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Conversely, gold has largely remained within a specific range, leading to an increased disparity with real yields. As a non-interest-bearing and non-coupon-bearing asset, gold's lack of yield becomes more pronounced when real yields turn positive, heightening the associated opportunity cost of holding onto this non-yielding precious metal.