Monday Precious Metals Market News (22 July 2024) | Gold Challenges Key $2,400 Support, Bulls Eye Key Economic Data Releases

 

Precious Metals Market News (22 July 2024) Gold Challenges New $2,400 Support Amid Political Controversy

Gold (-$2.58) is down again this morning after a weekend of game-changing political news in the United States introduced fresh uncertainty into markets. On Sunday (21 July), President Joe Biden dropped out of the 2024 presidential race. Calls for his withdrawal from the election began to mount after a poor debate performance against challenger Donald Trump on 27 June. Yesterday, the incumbent President announced on X that he would not accept his party’s nomination for President of the United States. 

pic.twitter.com/RMIRvlSOYw

— Joe Biden (@JoeBiden) July 21, 2024

The last sitting President to suspend a reelection campaign was Lyndon B. Johnson, who dropped out of the race because of record low approval ratings in 1968. This makes President Biden’s recent announcement a historic decision with a range of possible implications for the 2024 U.S. election cycle. Biden immediately endorsed Vice President Kamala Harris as his pick for the replacement nominee, and pundits are still unsure how the Democratic National Convention (DNC) will handle the nomination process. 

Last Wednesday (17 July), gold peaked at an all-time high at $2,482.97 per troy ounce as traders reacted to renewed interest rate cut bets, the attempted assassination on former President Donald Trump, and bullishness on the prospects of another Trump presidency. 

Gold established a soft support at $2,400 toward the end of last week, but three consecutive days of losses have now dragged the metal dangerously close to crashing below the $2,400 line. Historically, gold has performed well during periods of political uncertainty and controversy. Despite the whirlwind of news over the weekend, gold logged another day of losses since market open this morning (22 July).

Traders Eye Economic Data Reports to Gauge Gold’s Future

Expect a tug-of-war in the gold market as investors turn their attention to key economic data reports slated for release later this week. This year, speculation concerning interest rate cuts from the Federal Reserve has played a key role in price-action for the precious metal. A favorable Consumer Price Index report from 11 July had an immediate impact on the gold market as traders priced-in higher odds of an early rate cut from the Federal Reserve. 

The Fed is set to meet on July 30-31. Analysts do not anticipate a rate cut at this meeting, but leading Federal Reserve watchdogs consider a September rate cut all but certain. 

A slew of economic data reports are due later this week. Services and manufacturing PMI reports will be available tomorrow, the 23rd of July. On Thursday (25 July), the U.S. Q2 GDP report, jobless claims report, and various trade reports will be released. 

Week Ahead – July 22nd

In the United States, key highlights will include the advance Q2 GDP growth rate, PCE inflation, and personal spending and income. Additionally, other…

More here: https://t.co/9wkG0G13ND

— TRADING ECONOMICS (@tEconomics) July 19, 2024

The big data drop for gold traders happens on Friday, 26 July, when the Bureau of Economic Analysis releases its Personal Consumption Expenditures (PCE) report for the month of June. Additionally, the BLS will publish its year-over-year PCE analysis. Both reports will give traders – and the Federal Reserve – signals on whether or not the economy is moving in the right direction to justify early interest rate cuts. 

Previously, minutes from the Fed’s June meeting reaffirmed that the FOMC will consider cutting interest rates once inflation seems to be moving more sustainably toward its 2% target. Good news from the June PCE should have an immediate impact on gold prices as investors price-in the likelihood of rate cuts in either July, September, or November. 

Gold moved sideways this morning and now stands precariously on the edge of its newfound $2,400 support, but a blitz of economic data reports slated for release later this week means that traders should be ready to expect heavy movement in the gold market.