Gold prices extended their gains following the July Consumer Price Index (CPI) release, which matched market expectations and reinforced a dovish narrative regarding Federal Reserve policy, according to Bart Melek of TD Securities [1]. The yellow metal traded near $4,434 per ounce, with resistance identified just below $4,500 per ounce [1]. Melek noted that CTA (Commodity Trading Advisor) buy triggers are positioned near $4,468 per ounce, suggesting that gold may soon challenge this resistance level if momentum continues [1].
Despite the recent upward movement, Melek cautioned that it is premature to anticipate a breakout toward $5,000 per ounce. He emphasized that a decisive move above the $4,500 per ounce resistance would likely require stronger confirmation that the Federal Reserve will not raise interest rates this year [1]. As a result, gold is expected to remain near the upper end of its current, higher trading range, which has shifted upward since July [1].
Looking ahead, Melek stated that if no new inflation pressures emerge, gold could see significant upside, with a move to a '5-handle' (i.e., $5,000 per ounce) becoming a real possibility [1]. However, until there is greater clarity on the Fed's rate path, the gold market is likely to stay within its current range [1].
CONCLUSION
Gold prices are currently capped by uncertainty over future Federal Reserve rate hikes, with resistance just below $4,500 per ounce. While a breakout to $5,000 per ounce is possible if inflation remains subdued and the Fed holds rates steady, the market is expected to remain range-bound in the near term.