The number of Americans filing new applications for jobless benefits slipped last week. GDP increased at a 3.0% annualised rate last quarter, revised up from the 2.8% rate reported last month, the Commerce Department's Bureau of Economic Analysis said in its second estimate of second-quarter GDP on Thursday.

We saw a hike in gold prices yesterday (29/08/2024), thanks to two strong economic results. The gold price remains in the major uptrend that we previously identified. However, it appears to be consolidating as the gold price moves sideways, with a decrease in volatility.

Will it continue to move sideways? Is there any significant event that might cause gold to choose a direction? To answer these questions, let's consider the upcoming important events. Tonight, PCE data will be released, and the unemployment rate will be announced next Friday. Although a rate cut in September is almost certain and has been priced in, both of these data points are highly regarded by the Fed—PCE significantly impacts inflation, while the unemployment rate is currently the most closely watched indicator.

Based on past PCE performance, we can believe that the result released tonight will most likely meet expectations. This means we should pay more attention to next week's unemployment rate data.

Why? Because the main concern in the market now is still the risk of a recession. Evidence of this can be seen in the market's reaction after the Jackson Hole meeting. Therefore, the unemployment rate data release is an opportunity for us to gauge the current market sentiment. If the unemployment rate increases and exceeds consensus expectations, but prices remain stable, decline only slightly, or even surge, we can be confident that the market believes the Fed can manage the U.S. economy and avoid a recession. This would be the most ideal situation, as the market would remain bullish, even if with higher volatility or lower magnitude—at least it would still be bullish.

Ultimately, the only thing we can do is focus on the economic data releases and take necessary actions based on the released data and our observations of market sentiment.

Last but not least, Happy Merdeka!

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