Gold may continue to rally following US CPI data, which has increased expectations for a Fed rate cut in September

Gold prices eased from a new seven-week high on Friday morning as traders took profits following Thursday’s 1.9% rally, sparked by US CPI data.

The yellow metal received a fresh boost from cooler-than-expected US inflation, increasing the likelihood of a Fed rate cut in September (bets rose from 70% to 93%).

Easing consumer prices likely signaled what US policymakers were waiting for, as Fed Chair Powell indicated that while the central bank is on a rate cut path, it needs more evidence before making a final decision.

Gold prices moved to the upper side of a broader range below the new all-time high, supported by improving fundamentals such as falling inflation, weak economic data, and a deteriorating geopolitical situation. Bullish technical studies also support the scenario of a fresh acceleration through the $2,450 barrier, with the initial target of $2,500 coming into focus.

Corrective dips should ideally be contained at the $2,380 zone and not exceed the daily Tenkan-sen ($2,371) to keep bulls in play and offer better buying opportunities.

Res: 2424; 2433; 2450; 2500
Sup: 2392; 2380; 2371; 2355