GLD price analysis: Here’s what’s driving the market

The GLD gold ETF (SPDR Gold Trust) , which tracks the performance of the gold bullion, has continued to trade within a narrow range ahead of the July Fed meeting and Jackson Hole Symposium. The events come a few days after the disappointing US PPI data that had investors trim their bets for a September rate cut.  While the Treasury yield gains are bearish for the precious metal, geopolitical and economic uncertainties continue to support the bullion. 

GLD gold price in narrow range ahead of Jackson Hole, Fed minutes 

Data released last week showed that July’s US wholesale inflation surged the most in three years. The release had investors trimming their bets for a September interest rate cut by the Federal Reserve. 

In recent months, the Fed Chair has indicated that the US central bank would have begun easing its monetary policy by now were it not for the aggressive Trump tariffs. The Fed is striving to strike a balance between inflation that is still above its 2% target, and a cooling labor market. 

The ‘wait- and- see’ mood has GLD gold ETF price stuck in a narrow range, even as the higher lows point to a steady support at $303.50. On the one hand, geopolitical tensions and uncertainties on the health of the US economy have bolstered the demand for precious metals and other safe haven assets. 

Besides, the market forecasts at least two Fed rate cuts by the end of the year. However, the trimmed bets for such a move as soon as September have curbed its short-term gains. Notably, an environment of lower rates tends to support the non-yielding gold bullion. 

The market is now keen on the Fed Chair’s speech during the Jackson Hole Symposium for further cues on the central bank’s next move. This is in addition to the FOMC meeting minutes slated for release on Wednesday. 

With these two crucial events in focus, the benchmark 10-year Treasury yields extended its gains to trade at its highest level since the start of August. The surge, which is inversely related to the bond price, supported the US dollar while capping gold price gains. However, the continued diversification from the greenback has created a steady floor for gold price. 

GLD price technical analysis

GLD ETF stock | Source: TradingView

GLD gold ETF price remains range-bound even as it holds steady above the months-long support zone of $300. Over the past one week, it has been trading within an even tighter range as investors await a fresh catalyst. 

On Monday, the ETF hovered around the medium-term 50-day EMA for the third session in a row while still trading below the short-term 25-day MA. In the ensuing sessions, I expect it to remain within that tight range of between $305 and $310.15 as investors await further cues on the Fed’s next move. Indeed, the RSI of 46 supports the ongoing consolidation.