GLD ETF readies for breakout in event-packed week

GLD ETF has sustained last week’s gains as the market remains cautiously bullish. At the same time, gold price edged lower in early Monday session as a positive market sentiment offset Fed rate cut optimism. At the time of writing, the gold derivative was hovering slightly below the steady resistance of $313. 

Investors are seeking clarity on the Fed’s next move from key events slated for the new week. In particular, the US CPI data, deadline of the US-China tariff truce, and talks on Russia-Ukraine ceasefire are expected to impact the safe-haven demand and positioning of the US dollar. 

GLD gold ETF eyes key resistance as investors seek clarity on key fundamentals

Geopolitical tensions and concerns over the impact of Trump’s aggressive tariffs have been key drivers of gold’s historic rally. Notably, the bullion has had its price rise by about 27% year-to-date. Besides, it has held steady above the psychologically crucial zone of $3,000 an ounce since early April when Trump announced universal tariffs of at least 10%. The move had investors seeking security in precious metals and other safe-haven assets.   

In line with these fundamentals, investors are keen on the Russia-Ukraine ceasefire talks to be held in Alaska on Friday. However, Ukraine has vowed to reject a peace deal requiring it to give up any land to Russia. At the same time, the US-China tariff truce whose deadline is on Tuesday, 12th August may be extended for 90 days according to the US Commerce Secretary, Howard Lutnick. 

Optimism in the two diplomatic cases has boosted the risk sentiment while easing the demand for safe havens. While the fear & greed index has eased from last month’s extreme greed of 75, it has improved from last week’s greed level of 56 to 59. 

Even so, investors remain cautious ahead of the US CPI data slated for release on Tuesday. Economists expect the core CPI to have risen by 0.3% in July; a higher increase from the 0.2% surge in the previous month. 

The figures will offer cues on the Fed’s move in coming months. Amid the prevailing market conditions, the central bank is striving to balance the risks of a cooling labor market and inflation that is above its 2% target. Heightened bets of a Fed rate cut as soon as September are offering support to the non-yielding gold bullion.  

GLD ETF technical analysis

The GLD gold ETF ended last week on a high; sustaining the gains accumulated throughout the week. A look at its daily price chart shows the asset holding steady above the 25 and 50-day EMAs, signaling further gains in the ensuing sessions. 

At the time of writing, the ETF was trading at $313.05 with the bulls striving to break the resistance at $313.93. At an RSI of 57 and fundamentals that point to a wait-and-see mood, GLD gold ETF may continue trading within the narrow range of between $309.03 and $313.93 in the immediate term. Heightened safe-haven demand may yield a breakout to the upper resistance level of $316.18.