Gold Price at Crossroads: Will Volatility Await the Fed’s Decision?

Gold Price at Crossroads: Will Volatility Await the Fed's Decision?

Gold price was neutral last week. Volatility eased significantly as after a wider conflict between Israel and Iran eased significantly.

While prices rose on Friday after data showed US inflation rose in line with expectations, the safe-haven metal was on track. weekly decline as some geopolitical risk premiums fell.

The US personal consumption expenditures (PCE) price index rose 0.3% last month, in line with forecasts, unlikely to change expectations that the US Federal Reserve will delay interest rate hikes until September.

U.S. Treasury yields fell after the data was released, making gems more attractive.

Next week, the U.S. Treasury will update the public on its financing needs and provide more details on whether the bond issuance probably will. favors shorter or longer maturities — which is likely to affect longer-term yields and potentially precious metal prices.

The precious metal may soon face the reality that the Fed’s rate will stay higher for longer after inflation rates data will be published. . A flurry of warmer-than-expected price data culminated in Friday’s PCE release, with both headline and core inflation beating expectations.

Risk events next week include both planned and geopolitical events. On the geopolitical front, despite the easing of tensions between Israel and Iran, news of Russian strikes against Ukrainian power plants could reduce the risk aversion that emerged last trading week.

Planned risk events include the FOMC meeting, where there are no realistic . expectations for a change in interest rates, but the market is focused on how worried officials are about the year given the acceleration in inflation that appeared early on.

After that, non-farm payrolls are likely to add more volatility – however short-term – to dollar markets like gold. The labor market continues to show resilience, further delaying the Fed’s first rate cut. Also worth mentioning, the US ISM manufacturing data is attracting more attention than usual after disappointing Q1 GDP.

Technical Outlook – Gold Price

The price of gold recovered from a weekly low of 70202 and fell to 71500, a weekly decrease of 1.79%. Prices peaked at 72295 before the close.

Over the past four trading sessions, prices have consolidated above the important base of 70200, forming a small green candlestick on the chart. Additionally, prices traded above the short-term moving average, but the RSI does not give strong indications.

In the near term, 71780 will act as a major resistance and a fraction above it, prices may test the next resistance at 72200-73500. The downside is 71,020, but below that, prices could pull back to 70,500-69,800.

There are some key data and events this week that will decide gold’s.

Happy Trading!

Commodity Samachar
Learn and Trade with Ease

Also Read: Economic Outlook: US Fed or China PMI – Who’s Stealing the Spotlight this week?, Gold Prices: Recent Trends and Market Outlook

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