Gold Breakout Imminent? Watch Out for a Surge Above $2,380

LONDON (July 3) The summer doldrums have hit gold and silver, leaving them stuck in a sideways trading range. Even recent economic data, largely in line with expectations, hasn't spurred a breakout.

The Federal Reserve remains in a wait-and-see mode, keeping the market guessing on potential interest rate cuts with a 60% probability of a rate cut in September.

Investors are looking ahead to Friday's US labor market data for a sign of where the market might head next.

Central Banks Remain Bullish on Gold

Central banks have continued to be major buyers of physical gold, providing a strong pillar of demand for several years. In May, central banks purchased a net 10 tons of gold, with Poland emerging as the leader by acquiring 10 tons.

The National Bank of Poland has been actively buying gold for many months and ranked second globally for gold purchases in 2023. President Adam Glapinski has indicated that these purchases will continue. Other significant buyers in May included Turkey with 6 tons, India with 4 tons, and the Czech Republic with 3 tons.

China, however, took a break in its 18-month cycle of gold purchases, leaving it unclear whether this pause is temporary or marks the end of the buying spree. The medium- and long-term demand from central banks will be crucial for sustaining the current upward trend in gold prices.

Investing.com