Market Insights | As Risk Aversion Fades, Can Gold Still Rebound?

Key Highlights

• UK inflation continues to ease.

• Markets expect the Bank of England to keep interest rates unchanged.

• Gold remains in a bearish trend.

Market ReviewUK Inflation Cools, Rate Hike Expectations Continue to Fade

• UK inflation slowed in June as food and services inflation eased, reducing concerns over persistent price pressures.

• Core CPI came in at 2.6%, slightly above expectations, but overall inflationary pressures continued to moderate.

• Softer services inflation and slower wage growth suggest underlying inflation remains contained.

• Markets expect the Bank of England to keep interest rates unchanged throughout 2026, with potential rate cuts beginning next year.

Affected Assets: GBP, Gold, S&P 500

Market Summary

The continued decline in UK inflation has reinforced expectations that the Bank of England will leave interest rates unchanged, providing short-term support for the British pound. Meanwhile, easing safe-haven demand has kept gold under downward pressure.

Today's Key Events

• Australia Employment Change

• ECB Interest Rate Decision

• Canada Retail Sales

Today's Focus

Markets are closely watching the European Central Bank's interest rate decision. The ECB is widely expected to leave rates unchanged while maintaining a cautious policy stance.

Affected Assets:

• US Dollar

• Precious Metals (Gold, Silver, Platinum)

• US Equity Indices

Today's Trade Idea: Short Gold

Market Sentiment

As markets continue to digest developments in the Middle East, safe-haven demand has eased further. The US dollar has softened, while risk assets, including equities and cryptocurrencies, continue to recover.

Technical AnalysisXAUUSD

• Gold has broken below the EMA89 and EMA144 support levels.

• A bearish “N-shaped” price structure has formed, confirming the prevailing downtrend.

• The short-term outlook remains bearish, with selling on rallies preferred.