The economy of the US is heading towards recession thereby deteriorating the economic health of the country. There were fears circulating around that country may face recession mode soon if inflation is not controlled.
Yesterday, at FOMC meet, the officials announced that there would be a hike in interest rates either by 0.50 or 0.75 BPS in July month. Furthermore, all the necessary steps would be taken to cool down the overblown inflation rate.
During the COVID times, when the whole global economy was suffering then also FED keep the interest rates too low for a longer duration. Now, a sudden hike meeting-on-meeting basis may push the country into recession.
Moreover, even during the pandemic, the FED left with the same rates which lie between 0 and 0.25 percent for nearly around two years. But, now things have changed and FED raised the rates directly in the month of March by 0.25 BPS. Furthermore, the hike continues and raises by 0.50 BPS and then by 0.75 BPS.
Currently, we are expecting a hike of 0.50 BPS because the economy would not survive if interest rates rose at such a high pace.
The target of the Central Bank is to drop the inflation rate to 2 percent a year. However, the bank would take all the necessary steps or hike in interest rates theory to reduce the red hot inflation.
If we look deeper into the US inflation, then it is at a four-decade high since the late past year. Furthermore, the Consumer Price Index is on the progressive side and as of May, it is at 8.6 percent. Consequently, adversely affects the economic health of the country.
Today is Friday, either the last day of the week or the beginning of the month. We may experience good volatility in the market at the beginning of the month due to economic forecasts.
Wednesday tends to be a relaxing day for traders as we have seen a downside panic in both base metals and bullion. Both energy and base metal have given a dead-cat bounce from lower levels. Precisely, traders who are sitting for long booked profits.
For now, both base metal and energy took the Wednesday lower level as their major support level. Along with this, bullion has also traded in a very tight range.
Today, all eyes are on Gold and Silver…!!
The major reason behind this is we have Us Employment Change Data today at 6:00 PM. Moreover, we are anticipating the forecast figures to be worse as compared to last.
Earlier, the data witnessed at 390000 but this time economist is predicting nearly around 260000.
What if the forecasting figure matches the actual figure?
We are expecting the forecasting figure worse as compared to the last one. If it matches with the actual one today, then it may give support to the levels of the yellow metal.
After a fall in crude oil prices, we may experience that America is one step towards controlling inflation. Along with this, we are expecting Consumer Confidence to be up.
FED is persistently increasing the interest rate which may build pressure on the global equity market and the dollar index.
Furthermore, Gold and Silver got stuck and consistently played tug of war between interest rates and recession.
Technical Levels for today
Comex Gold has major support at $1730 and resistance at $1755. If Comex Gold breaches the level of $1730 then we may downside target of $1712—$1705. However, may further lead to $1690.
Fresh buying we will witness above $1755 on a closing basis.
Comex Silver has major support at $18.90 and resistance at $19.50. If Comex Silver breaches the level of $18.90 then we may witness a downside target of $18.60—18.35.
Fresh buying we will witness above $19.50 on a closing basis.
Till 5:00 PM we are expecting the market to be in a tight range. Trade safely.
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