Gold market analysis

"Gold Weakness Expected to Persist Through Next Week" 15/8/2025 9:53 Completed
Yesterday, the US Department of Labor released the Producer Price Index (PPI) for July. Both the overall and core PPI rose by 3.3% and 3.7% year-on-year, significantly higher than the 2.4% and 2.6% increases in June. The monthly increase was 0.9% for both, compared to no change in June. The data dampened investors' expectations of a rate cut by the Federal Reserve in September, but interest rate futures indicate that the probability of a rate cut still exceeds 90%, suggesting that the chance of a rate cut in September remains high. San Francisco Fed President Daly stated that he opposes a 50 basis point rate cut in September, arguing that it would send an emergency signal and show a lack of confidence in the strength of the labor market. From another perspective, he has not changed his stance in support of a rate cut in September. 

The chances of the Federal Reserve cutting interest rates in September remain high. 

Although PPI is regarded as a leading indicator of inflation, there are certain differences between PPI and CPI in terms of the categories of prices collected and the collection time. Therefore, it is not surprising to see a deviation between the two. Of course, it is normal for the market to have a strong reaction to effectively manage risks. As a result, US stocks fell, the US dollar exchange rate and US bond yields rose. However, as the market still expects a 90% probability of a rate cut in September, the data did not change the market's view on a rate cut in September. 

The intraday decline target is $3,297. 

Gold prices were under pressure. By the end of the New York midday session yesterday, the spot gold price had once dropped below $3,330, further confirming that $3,370 has become a short-term resistance level. Yesterday, the gold price again presented a piercing pattern on the daily chart, indicating that the top near $3,375 yesterday has become a new resistance level. If the closing price today is below $3,345, the gold price will show a bearish signal on the weekly chart, and in the worst case, the weakness will continue for most of next week. This morning, the gold price hit a low of $3,332 before rebounding and once again rose above $3,340. In the short term, using the Fibonacci extension line to measure the movement since August 8th, if it reaches 100%, the gold price will fall to $3,297, which is also today's downside target. A rebound within the day is expected to face significant resistance at $3,352. 

The above content is for reference only and does not constitute investment advice. 

MTF Special Analyst Zheng Guangfu