Gold prices are steady even though US housing data fell short of expectations and Federal Reserve Chair Powell made hawkish comments. His testimony before the Senate Banking Committee didn’t change forecasts for a rate cut by September, which limited any upward movement for gold. Gold is trading slightly above $3,300 as market participants consider the effects of recent US economic data and Powell’s statements, especially after Israel and Iran agreed to a ceasefire.

US Housing Data Impact

In May, US New Home Sales hit 623,000, lower than the expected 690,000 and showing a 13.7% drop from April’s 9.6% increase. Powell’s upbeat outlook for the US economy was called into question as consumer confidence fell from 98.4 in May to 93.0 in June. Currently, gold is trading in line with the 50-day Simple Moving Average at $3,325. For a sustained recovery, gold needs to break above $3,355, with possible resistance at $3,400. If it drops below $3,300, it may test support at $3,228. The upcoming US Personal Consumption Expenditures (PCE) data will be a key factor influencing the market’s expectations around interest rate changes. This situation highlights not just recent gold behavior but also potential short-term opportunities and risks, especially for those involved in rate-sensitive investments. The lack of a strong reaction in gold prices to troubling data or Powell’s hawkish stance suggests that markets still anticipate interest rate reductions by the end of the year, even if official language hasn’t acknowledged this yet.

Market Volatility and Trends

The gap between market expectations and official statements creates an environment ripe for volatility. Powell’s comments about confidence in the US economy seem off base given the significant drop in consumer sentiment. The contrast between decreasing housing data and consistently high interest rates puts pressure on the Fed’s future decisions. Traders are understandably adjusting to this divergence. From a technical perspective, trading near the 50-day SMA often attracts short-term interest. Stability above $3,300 suggests a solid support level, although it appears fragile. The important level at $3,355 is significant—not just because it’s a key number, but because it’s where momentum could shift dramatically. If this level remains unbroken, the chances of profit-taking or cautious trading increase. Support around $3,228 may get active if US economic data continues to disappoint. The housing report’s drop of over 13% indicates a declining appetite among consumers in a high-rate environment. If this week’s PCE data also softens, bond yields may fall, making non-yielding assets more attractive. Our team is closely monitoring the implied volatility in near-term options. So far, gold has shown little movement despite shaky economic indicators, suggesting that risk pricing is low. Such imbalances can change quickly. Whether this shift happens due to the PCE data or an unforeseen policy change remains to be seen, but it’s important not to overlook it. With this in mind, traders should avoid positioning solely based on directional bias. Instead, it makes sense to consider optionality—strategies that allow for larger moves in either direction without overcommitting given the current price range. As macro data continues to conflict with policy statements, attention is crucial. This kind of tension rarely resolves without some upheaval. Create your live VT Markets account and start trading now.

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