Gold Price Today: Will Resistance Hold the Yellow Metal Back?

Gold Price Today: Will Resistance Hold the Yellow Metal Back?

The Gold price today received support yesterday after a lower-than-expected US inflation report, increasing the likelihood that the Federal Reserve (Fed) will cut interest rates later this year.

 However, the Fed’s dovish stance and Fed Chairman Jerome Powell’s failure to time rates prompted interest rate cuts. Federal Reserve holds rates steady at the 5.25%-5.50% range.

The XAU/USD trades at $2,325, gains 0.35%.

In FOMC meeting, Fed Chair Jerome Powell stat ed that they are less confident about inflation than previously “in order to cut.” He added, “If jobs are to weaken unexpectedly, the Fed is ready to respond.” When asked about the day’s US inflation report, Powell mentioned that it is just one report and emphasized the need to see the deflation process evolving toward the Fed’s goal.

Meanwhile, the Federal Open Market Committee (FOMC) monetary policy statement revealed the Fed do “not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.” They added that “the Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.”

Aside from this, the so-called ‘dot-plot’ showed that the median of the Fed officials upward revised their projections of the federal funds rate from 4.6% to 5.1%, toward the end of 2024. This means they are foreseen just one rate cut, compared to the current effective federal funds rate standing at 5.33%.

Federal Reserve officials updated their economic projections for 2024. According to the Summary of Economic Projections (SEP), they expect the economy to grow 2.1%, as foreseen in March, while the Unemployment Rate is estimated at 4%, unchanged from the previous SEP. PCE inflation is expected to edge higher from 2.4% to 2.6%, and Core PCE to rise from 2.6% to 2.8%.

Earlier, The core personal consumption expenditures price index, the Fed’s preferred measure of inflation, is forecast to be 2.8% in 2024, up from a prior forecast of 2.6%. For 2025, inflation is estimated to be 2.3%, up from 2.2% previously.

Technical Outlook – Gold Price Today

The Comex Gold price today settled at $2325.30 compared to previous day’s close of $2316.9, up 0.35%.

Since 21 May 2024, prices momentum remains negative and prices retreated nearly 5%, from the peak of $2450.1250 to a low of $2286.83.

On the above chart, falling three methods candle stick pattern was noted. Further, prices struggling to cross short-term moving averages. Now, immediate support is seen at $2297.80 a break below it pressure could expect towards $2282.50-$2265.00 very soon.

On the upside, immediate resistance is seen at $2340.50 above it $2355-$2368.00

Also Read: Nifty Hits New High, But Ends in Red: Is the Rally Sustainable?, ForexNewsLetter: US Inflation Slows to 3.3% in May, Below Expectations

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