Gold’s next big move seems to be hanging in the balance as traders and investors wait for a clearer picture on US interest rates and the dollar’s direction, according to a fresh report by Emkay Wealth Management.
As per the report, the much-anticipated rally in gold prices hasn’t taken off yet due to the lack of strong triggers, especially the uncertainty around rate cuts by the US Federal Reserve. “One of the major triggers for gold, the clear direction of US interest rates, is currently absent,” the report said.
A potential rate cut could weaken the US dollar, making gold cheaper for other currency holders and possibly driving new demand. As of now, though, firmness in the dollar and a rise in US bond yields have kept pressure on gold prices, pushing the market into a holding pattern.
Gold and the US dollar generally move in opposite directions—when the dollar weakens, gold tends to get a boost. However, in recent weeks, the dollar has remained strong, keeping the lid on any strong upside movement in gold.
Emkay Wealth pointed to support levels at USD 3,297 and USD 3,248, suggesting that gold prices could find some stability around those marks if downward pressure continues.
“What we need to see is a further fall in the dollar, driven by official rate cuts and lower market yields,” Emkay noted. But a new complication has entered the mix—Washington’s latest budgeted spending of around USD 4.60 trillion could raise borrowing and keep yields higher for longer, delaying the dollar’s decline.
The report also mentions a phase of consolidation in the gold market, which historically often comes before a strong directional breakout. Earlier this year, gold had surged due to strong buying from China, but that momentum faded after China started selling in late April and early May.
While that particular factor isn’t weighing in much now, the market is still on standby, waiting for bigger macroeconomic cues. Until then, investors remain focused on signs of easing US rates, dollar weakness, and shifting bond yields to spot the start of the next possible bull run in gold.
Brinks Report will continue tracking this closely.
