- Gold price is trapped by support and resistance ahead of key events.
- Bears eye a continuation of the broken-down market.
Gold price was a touch lower on Monday towards the close on Wall Street. closed with a small loss on Monday as the dollar moved higher ahead of the Wednesday end of the two-day meeting of the Federal Reserve's policy committee. At the time of writing, Gold price was 0.11% offered and had travelled between a high of $1,967.01 and reached a low of $1,949.28.
The main focus for the week will be on the US Consumer Price Index on Tuesday and then the outcome of the Federal Reserve's two-day meeting. The CME Fedwatch tool seeing a 74% chance the meeting will end Wednesday without another rise in interest rates.
''is likely to come down to the wire, but we maintain our long-held view that the Fed will tighten by a final 25bp in June to a range of 5.25%-5.50%. If the Fed decides to 'skip' the June meeting, we expect the decision to be accompanied by communication that leans hawkish (ie. statement, dot plot, and presser), signaling a likely hike in July,'' analysts at TD Securities explained.
Meanwhile, the May inflation rate on Tuesday will be a key focus and could shift the needle in that regard. Markets are expecting prices last month to have risen by 4% annualized last month, this is lower than the 4.9% marked in April.
''Core prices likely stayed firm in May, with the index rising a strong 0.4% m/m for a second straight month, also matching the m/m avg since June 2022,'' analysts at TD Securities said. ''Goods inflation likely stayed positive, with shelter prices remaining the key wildcard (expect slowing). Retreating gas prices (-6% MoM) will drag non-core inflation. Our m/m forecasts imply 4.0%/5.3% YoY for total/core prices.''
Leading into the events, bond yields were mixed. The US two-year note was last seen paying 4.577%, down 2.9 basis points, while the 10-year note was up 3.0 points to 3.772%. The ICE dollar index was last seen trading near 103.62 after moving up from a low of 103.242 and scoring a nearby high of 103.75.
Gold technical analysis
The price is trapped between key breakout support and resistance as illustrated in the daily and 4-hour charts above.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD weakens further as US Treasury yields boost US Dollar
The Australian Dollar extended its losses against the US Dollar for the second straight day, as higher US Treasury bond yields underpinned the Greenback. On Wednesday, the AUD/USD lost 0.26% as market participants turned risk-averse. As the Asian session begins, the pair trades around 0.6577.
EUR/USD stuck near midrange ahead of thin Thursday session
EUR/USD is reverting to the near-term mean, stuck near 1.0750 and stuck firmly in the week’s opening trading range. Markets will be on the lookout for speeches from ECB policymakers, but officials are broadly expected to avoid rocking the boat amidst holiday-constrained market flows.
Gold price drops amid higher US yields awaiting next week's US inflation
Gold remained at familiar levels on Wednesday, trading near $2,312 amid rising US Treasury yields and a strong US dollar. Traders await unemployment claims on Thursday, followed by Friday's University of Michigan Consumer Sentiment survey.
President Biden threatens crypto with possible veto of Bitcoin custody among trusted custodians
Joe Biden could veto legislation that would allow regulated financial institutions to custody Bitcoin and crypto. Biden administration’s stance would disrupt US SEC’s work to protect crypto market investors and efforts to safeguard broader financial system.
Navigating the future of precious metals
In a recent episode of the Vancouver Resource Investment Conference podcast, hosted by Jesse Day, guests Stefan Gleason and JP Cortez shared their expert analysis on the dynamics of the gold and silver markets and discussed legislative efforts to promote these metals as sound money in the United States.