GOLD limits recovery, after CPI, FOMC and Powell's statement

Updated

XAUUSD fell slightly during the Asian session on June 13, following the US CPI data report and the US Federal Reserve's interest rate decision. The 0.236% Fibonacci level limited the recovery momentum of gold price to keep it in the price channel.

Data released by the US Bureau of Labor Statistics on Wednesday showed that the US consumer price index (CPI) in May increased 3.3% year-on-year, down from the previous value and the expected value is 3.4%; unchanged from the previous month, 0.1% lower than expected and also lower than the previous value. Values slowed significantly to 0.3%, the lowest level since July 2022.
Excluding food and energy costs, May core CPI increased 3.4% over the same period, lower than the expected 3.5% and lower than the previous 3.6%, the lowest level in more than 3 years. year; The increase in May increased from 0.3% in April to 0.2%, weaker than the 0.3% expected.

These data coincide with a deceleration in core CPI in April and may represent the early stages of inflation returning to a downward trend. However, Fed policymakers have emphasized that they will need to see price pressures abate for several months before considering lowering interest rates, especially as the latest jobs report sparks a debate. discuss the extent of policy limitations.

The report was released hours before the Federal Reserve ended its two-day policy meeting in Washington.

The Federal Reserve left its benchmark interest rate unchanged at 5.25%-5.50% for the seventh straight time on Wednesday, in line with market expectations. The Fed's Dotplot chart shows that it is expected that the agency will only cut interest rates once in 2024.
Markets expected the Fed to adopt more supportive policies, but US Federal Open Market Committee (FOMC) policymakers reduced plans to cut interest rates three times in March to 2 times after a 2-day meeting.
The committee also signaled that it sees longer-term interest rates higher than previously suggested. The new forecast released after a two-day meeting this week showed inflation still on track to return to the Fed's 2% target, allowing for some policy easing later this year.
The statement after the meeting said: "Inflation has eased over the past year but remains high." The only significant change is that the new statement continues to say that "more modest progress has been made in recent months toward the FOMC's 2% inflation target." While the previous statement was "lack of further progress" on inflation.

On the same day Wednesday, Federal Reserve Chairman Jerome Powell emphasized in a press conference that the Fed was not yet confident in starting to cut interest rates, but also said that no one considered a rate hike an expectation. basic. Powell's statement can be interpreted as keeping interest rates high for longer but ruling out a rate hike.

Overall assessment, CPI data has boosted gold prices in the short term, but after the FOMC announcement and Powell's statement reduced the possibility of gold price recovery because the USD became attractive, when the possibility of interest rates The high will last for a longer period of time.
The fundamental picture after yesterday's trading day temporarily leans more towards the possibility of creating pressure on gold prices, but traders also need to pay attention to other unexpected impacts from geopolitical news. is still smoldering in many parts of the world. Gold is often supported when geopolitical risks escalate.

Analysis of technical prospects for XAUUSD
On the daily chart, after gold's recovery yesterday, it was capped by key resistance that readers noticed in the previous issue at the $2,340 - $2,345 area, the price range of this level. Fibonacci retracement 0.236%.

Gold's fall below $2,324 continues to provide prospects for it to test the $2,300 base and once the $2,300 base is broken below gold will be eligible for a new bearish cycle. with the latter target around $2,286 in the short term, more than the 0.382% Fibonacci level.
That said, the original price level of 2,300 USD is also the closest current support worth noting.

During the day, the technical outlook for gold prices remains bearish with notable technical levels as follows.
Support: 2,300 – 2,286USD
Resistance: 2,324 – 2,340USD

🪙SELL XAUUSD | 2338 - 2336

⚰️SL: 2342

⬆️TP1: 2331
⬆️TP2: 2326

🪙BUY XAUUSD | 2279 - 2281

⚰️SL: 2275

⬆️TP1: 2286
⬆️TP2: 2291

Note

THE US FEDERAL RESERVE'S ECONOMIC FORECASTS SHOCK GOLD TRADERS

Yesterday, Wednesday, the US Federal Reserve issued its economic forecasts for the coming years, and in this context, US interest expectations were adjusted to only one cut this year, and US inflation expectations were also revised during this year and next, and these new expectations had a negative impact on gold’s movements.

Note

🟢US unemployment claims data is negative for the second week in a row!

Data issued by the US Labor Office on Thursday showed that the number of applications for unemployment benefits in the country increased to about 242 thousand applications during the past week ending on June 7, which was higher than market expectations, which indicated that applications for unemployment benefits would rise to 225 thousand applications. The previous reading of US unemployment claims recorded 229 thousand applications.

Note

Will persistently improving inflation data be enough for the Fed to begin a easing cycle that benefits markets?

- The US producer price index (PPI) unexpectedly fell in May, with the producer price index falling 0.2% MoM after a steady increase of 0.5% in April. Core PPI MoM also announced lower at 0.0%. (expected 0.3%, previously 0.5%)

Note

Gold prices increased when new data on the US economy increased the possibility that the US Federal Reserve (Fed) would start cutting interest rates in September this year.

The University of Michigan's consumer survey report showed that the consumer confidence index in June decreased to 65.6 points, down from 69.1 points in May and much lower than the forecast of 71. 5 points given by economic experts in a survey by Dow Jones news agency.

Note

GOLD MARKET ANALYSIS AND COMMENTARY - [June 17 - June 21]

Note

As expected, the Fed agreed to keep monetary policy unchanged. However, their latest forecast suggests just one rate cut before the end of the year, instead of three as suggested in March.

Note

XAUUSD retreated from the support zone at around $2,300 with weak momentum and consolidated just below the resistance zone at $2,350.

If it sustains above $2,325, the price could test $2,350 and the high set on June 7. However, if it trends below the $2,300 support zone, XAUUSD could drop to the support level. next psychological aid.

Note

At a press conference held on Monday, the European Central Bank's chief economist, Philip Lane, noted that in the event of sharp fluctuations in the euro's movements in the forex market, this will have an impact on the ECB's monetary policy decision.

Note

Gold prices fell on Monday (June 17), influenced by rising US bond yields, while investors waited for more US economic data and comments from Reserve officials. The US Federal Reserve (Fed) this week will have more signals about the outlook for monetary policy.

Note

🟢The dollar rises as more signals are awaited about the direction of US interest rates

The dollar rose today, Tuesday, as traders awaited an important report on US retail sales and statements from the US Federal Reserve, searching for clear signals about the timing and pace of reducing interest rates.

Note

➡️The dollar continues to be under pressure due to negative economic data

At the same time, the dollar was subjected to some pressure due to negative economic data, which raised concerns about the economic conditions within the United States, as the United States Census Bureau on Tuesday issued US retail sales data for the month of May, which was negative and below market expectations.

Note

🟢It is too early to say whether inflation is falling to 2%.
🟢It is appropriate for the US central bank to remain patient regarding monetary policy decisions.
🟢I have realistic optimism about economics and politics.

Note

➡️THE PERFORMANCE OF THE US DOLLAR NOW

During global market trading on Wednesday, the US dollar index (which measures the performance of the US currency against a basket of six other foreign currencies) witnessed a decline of 0.08% and reached the level of 105.165 points, affected by several factors

Note

World gold prices were little changed last night and this morning (June 20), when the US financial market was closed for a holiday and investors were still "hungry" hoping that the Fed could cut interest rates in September. 9. According to some experts, gold prices are unlikely to increase sharply in the short term, but the factors that support the price of this precious metal in the long term remain unchanged...

Note

World gold prices increased sharply in the trading session on Thursday (June 20), after statistics showing the weakness of the US economy reinforced the possibility that the Federal Reserve (Fed) would start interest rate cut in September this year. Some experts say bulls have regained the upper hand in the gold market and are aiming for the next target of prices above 2,400 USD/oz.

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