Near-future sentiment will depend on a Federal Reserve meeting outcome. A prospect of a slower rate hike or pause will lead to bullish momentum in Gold prices or vice versa.
Gold prices trading with minor gains. The trading range is extremely narrow as a result of traders bracing themselves for important U.S. inflation data as well as a number of significant central bank meetings this week. A mixed cue on the global economy and U.S. monetary policy also holds it in indecisive mode.
Furthermore, Since expectations surrounding the Fed will slow its pace of interest rate hikes in its policy meet, the dollar index weakens against its other major counterparts. Now the currency is trading at 103.249, down by 0.37%.
The Fed is widely expected to pause its year-long tightening cycle as officials assess the impact of lifting interest rates to a 16-year high, but the release of the latest U.S. consumer inflation numbers could alter expectations.
The May CPI release is expected to show a rise of 4.1% over the year and 0.2% for the month, down from 4.9% and 0.4%, respectively in April. It is anticipated that core prices, which exclude volatile food and energy, will increase 5.3% annually and 0.4% monthly.
Technical Outlook –
On the chart, since 2 June 2023, Gold prices consolidating above their crucial support of 59200, while facing the resistance of 60200 levels. The recent price action is forming a pennant pattern. However, a bullish confirmation will come after a break above 60120. For the upside target 60500-61050.00-61500.
Alternatively, prices may consolidate in between the range of 60120-59200.00 in the near future.
On the downside, a break below 59200 will witness a free fall in Gold prices. It could test 58550-58050 thereafter.
Further, Fed decision and CPI data will play a vital for the near future momentum. A rate pause will put pressure on the dollar. As we know, the dollar and bullion have an inverse relation in the price movement. A weaker dollar could lead to bullish momentum in bullion or vice versa.