In the focal point of global financial markets, every fluctuation in gold prices touches the hearts of investors. On Thursday, July 11th, gold prices strengthened for the third consecutive trading day, with spot gold rising 0.4% to $2381.13 per ounce and US gold futures GCcv1 rising 0.3% to $2386.20. Behind this trend is the market's expectation and anxiety about the upcoming release of US inflation data.

Inflation data and the interest rate path of the Federal Reserve

The decline of the US dollar has brought a hint of warmth to the gold market. Gold priced in US dollars is more attractive to holders of other currencies, which to some extent supports the rise in gold prices. However, a deeper driving force comes from market expectations of US inflation data and its potential impact on the Federal Reserve's interest rate decisions.

Renowned institutional analyst Edward Meir stated that if the CPI report unexpectedly falls below expectations, it could weaken the US dollar and push gold prices up to the level of $2400. This prediction undoubtedly adds uncertainty to the gold market.

The statement by Federal Reserve Chairman Powell also provided clues for the market. He stated that the Federal Reserve will make interest rate decisions when needed, and more good data will provide evidence for interest rate cuts. According to the FedWatch Tool from CME, traders currently believe that there is a 73% chance that the Federal Reserve will cut interest rates for the first time in September.

The upward trend and key resistance levels of gold prices

From a technical analysis perspective, the gold price has continued its recovery momentum. Senior analyst Dhwani Mehta pointed out that the gold price target is still aimed at $2400 per ounce. If the year-on-year CPI data in the United States is weaker than expected, or if the month on month data unexpectedly declines, it may confirm the Federal Reserve's decision to cut interest rates in September and increase the possibility of another rate cut in December.

However, if there is hot inflation data, it may hinder the Federal Reserve from cutting interest rates as early as September, which will put pressure on gold prices. In this situation, the gold price may fall towards $2300 per ounce.

Global central bank gold purchases and market dynamics

In the dynamics of global central banks, the Bank of Uganda has started purchasing locally produced gold to enhance its depleted foreign exchange reserves and address emerging challenges in the international financial market. This action reflects the global central banks' emphasis on gold as a reserve asset and may also have an indirect impact on gold prices.

The New Normal of the Gold Market and Geopolitical Risks

Edward Meir believes that gold is in a new pattern, in a higher trading range, and we will no longer see the lows we reached before. If there is a geopolitical shock, the gold price may reach a new high this year. This viewpoint provides a possible perspective for the long-term trend of the gold market.

In the current market environment, the future direction of gold prices is full of uncertainty. Investors need to closely monitor the upcoming inflation data and the Federal Reserve's interest rate decisions. Meanwhile, the buying dynamics of gold by global central banks, as well as geopolitical risks, may also have an impact on gold prices.