Gold continues to consolidate
Gold continues to consolidate. This follows its month-long rally which began after it briefly broke down below $2,000 per ounce in mid-February. Last week, gold pulled back from its best levels as the dollar jumped higher on hotter-than-expected inflation data. The news has led to speculation that the Federal Reserve may push back the timing of its first rate cut. At the beginning of the year, the odds favoured a cut at this week’s FOMC meeting. Then the probability shifted to June. But the upticks in last week’s CPI and PPI are pushing out expectations to July or even September. While the market assigns little likelihood to a cut on Wednesday, it is hoping that the FOMC’s ‘Dot Plot’ will help clear up the Fed’s thinking when it comes to the timing and number of cuts expected this year. This could affect gold as it has previously been boosted by the prospect of lower borrowing costs.
For now, $2,150 is holding as support on a closing basis. But we did see a brief dip below here earlier today. A more substantial pullback can’t be ruled out, given the gains made over a relatively short period. But a longer consolidation around current levels could also help to reset the MACD, and provide a basis for the next leg in this rally. Wednesday’s ‘Dot Plot’ could prove to be crucial in influencing the direction of the next big move.
For now, $2,150 is holding as support on a closing basis. But we did see a brief dip below here earlier today. A more substantial pullback can’t be ruled out, given the gains made over a relatively short period. But a longer consolidation around current levels could also help to reset the MACD, and provide a basis for the next leg in this rally. Wednesday’s ‘Dot Plot’ could prove to be crucial in influencing the direction of the next big move.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.