Although the gold market failed to hold its initial support level of $2400 per ounce over the past week, it has successfully maintained a key bullish trend line above $2350 per ounce, which some analysts believe could create new bullish momentum for precious metals.

Last Friday (July 26th), August gold futures closed at $2385.7 per ounce, up more than 1% on the day; However, it fell 0.6% from the previous week's closing price. On Monday in the Asian market, COMEX gold futures rose slightly and are currently trading around $2398 per ounce, supported by the tense geopolitical situation in the Middle East.

Despite recent fluctuations, analysts point out that gold has maintained a steady upward trend as the market increasingly expects the Federal Reserve to cut interest rates by the end of this quarter. According to the Chicago Mercantile Exchange's FedWatch tool, the market has fully digested the impact of the September rate cut.

Kelvin Wong, Senior Market Analyst at OANDA, stated that he believes the pullback in gold is a price fluctuation within a broader upward trend.

In his comments, he said: "In view of the fact that the Federal Reserve still tends to implement the interest rate reduction cycle rather than the interest rate increase cycle in the medium term, and the actual yield of the 10-year treasury bond bond of the United States is still hovering below the 2.05% key medium-term resistance level, gold is still in the medium-term upward trend stage, so the market is still bullish on gold."

George Milling Stanley, Chief Gold Strategist at State Street Global Investment Management, stated that he also expects gold prices to maintain a bullish trend as it is clear that interest rates are only moving in one direction.

Milling Stanley said, "The Federal Reserve is expected to cut interest rates in September and begin a new easing cycle, which will push the US dollar lower and provide a tailwind for gold

Beneficial for precious metals is that although the inflation rate remains above the central bank's 2% target, the market is still actively digesting expectations of a late summer interest rate cut. The US Department of Commerce stated that its core personal consumption expenditure price index has risen by 2.6% in the past 12 months, unchanged from the previous month.

Economists say that the latest inflation data will not prevent the Federal Reserve from cutting interest rates in September. More and more people expect the Federal Reserve to lay the foundation for a rate cut in September at least at this week's meeting.

The forward-looking guidance prepared by the committee will be the key to initiating the easing cycle. Although Powell may not fully commit to a rate cut in September, he may imply that the Federal Reserve is about to cut interest rates, "said a fixed income analyst at TD Securities.

Although the Federal Reserve's monetary policy meeting will be the main economic event of the week, it will share the focus with the US Department of Labor due to the release of July non farm payroll data on Friday.

In addition to the cooling of inflation, economists predict that the slowdown in the growth momentum of the US labor market will prompt the Federal Reserve to lower interest rates before the end of the year.

The Federal Reserve is not the only central bank to hold a monetary policy meeting next week. The Bank of England will announce its interest rate decision on Thursday, and analysts expect the central bank to cut interest rates. Meanwhile, the Bank of Japan will hold a monetary policy meeting later on Tuesday.

Economic data worth noting:

Tuesday: US Consumer Confidence Index; JOLTS job vacancy; Monetary Policy Decisions of the Bank of Japan

Wednesday: ADP employment data; Sale of properties for sale in the United States,

Thursday: Bank of England monetary policy decision; US initial jobless claims, ISM manufacturing PMI

Friday: US non farm payroll report