Gold (XAU/USD) remains at $2324, despite a US dollar weakened by unexpected figures from the US Purchasing Managers’ Index (PMI). This stability stems from the decision of Federal Reserve officials to postpone planned interest rate cuts, thereby limiting the potential rise in gold.
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Geopolitical conflicts reinforce the appeal of gold
Ongoing geopolitical conflicts in the Middle East and Ukraine continue to strengthen gold’s appeal as a safe haven, supporting its price despite market volatility.
Expectations for Federal Reserve actions and economic indicators
Attention now shifts to upcoming communications from Federal Reserve officials, particularly Lisa Cook and Michelle Bowman, whose perspectives could influence market expectations.
This week is crucial with the release of key US economic indicators: the final first quarter Gross Domestic Product (GDP) figures and the May Personal Consumption Expenditure (PCE) Price Index.
“Reading these indicators is crucial to assessing economic health and could dictate the Fed’s monetary policy in the future,” said the president of the Federal Reserve of San Francisco.
She stressed that rate cuts would only be considered when inflation consistently approaches the 2% target, highlighting the potential risk of rising unemployment if inflation remains high.
Investor sentiment and market predictions
Market sentiment is both cautious and optimistic about the Fed’s potential actions, with the CME FedWatch tool indicating a 66% chance of a rate cut in September.
This sentiment is influenced by the expected increase in the US main and core PCE indices, which are expected to confirm a 2.6% year-on-year increase in May. This data will be crucial in shaping future monetary policies and, by extension, the trajectory of gold prices.
This comprehensive analysis aims to provide investors and the general public with a clear understanding of the forces influencing current gold market dynamics and its future prospects.
Gold Technical Outlook – Price Forecast
Gold (XAU/USD) is trading at $2324.41, down 0.29%. The 4-hour chart reveals a pivot point at $2329.90, crucial for traders. Immediate resistance levels lie at $2337.56, $2343.84 and $2349.51, indicating potential upside targets.
On the downside, support is found at $2318.07, $2308.01 and $2298.92. The relative strength index (RSI) is at 43, suggesting neutral market sentiment. The 50-day exponential moving average (EMA) at $2331.72 acts as resistance.
The general outlook remains bearish below $2329.90, and crossing this level could signal a shift to bullish momentum.
