Gold Price Forecast: XAU/USD finds support on a weaker USD, high inflation negates downside risks – ANZ

FXStreet Insights Team FXStreet

The inverse correlation between gold and the US 10-year yield has broken down. A weaker US dollar is providing support, while higher inflation is negating downside risk of aggressive rate hikes, strategists at ANZ Bank report.

Gold ETF flows are recovering

“Rising geopolitical tensions are outweighing rising yields. Stronger than expected inflation is another key support, which is keeping the US dollar on a weaker footing and mitigating the chances of an aggressive rate hikes.”

“Investment demand is improving, with ETF holdings of gold up by 64t year-to-date. This follows a net liquidation of 300t in 2021. Investors are also adding fresh long positions in gold. Lean speculative positions leave room for a build-up of fresh longs and limited liquidation risk.”

“Physical gold demand in China was strong during the Lunar New Year holidays, as reflected in the gold spot premium. China imported nearly 818t of gold in 2021, and January imports are strong due to festive demand.”

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD falls to near 0.7100 after slipping below 50-day EMA

AUD/USD depreciates after registering minor gains in the previous day, trading around 0.7120 during the Asian hours. The technical analysis of the daily chart shows the pair consolidating sideways within a rectangle pattern, as neither bulls nor bears gain control. The AUD/USD pair is holding a slight bearish tone however as it sits beneath both the nine-day and 50-day EMAs.

160.00: USD/JPY back near intervention territory after upbeat US jobs report

US Nonfarm Payrolls beat expectations by a wide margin in May, with 172K jobs added. The US Dollar rebounds after the release, helping USD/JPY recover from its intraday lows. Warnings from Japanese authorities continue to limit upside potential near the 160.00 threshold.

Gold targets $4,300 amid stronger Dollar

Gold faces increasing selling interest and navigates the area of three-month lows near the $4,300 mark per troy ounce on Friday. The precious metal’s decline comes as traders assess the stronger-than-expected NFP, while the bid bias in the Greenback and higher US Treasury yields also collaborate with the retracement.

Cardano hits five-year low even as Hoskinson clarifies "break" isn't an exit

Cardano (ADA) price is down 10% at press time on Friday, extending losses over 30% so far this week amid Charles Hoskinson's clarification that "break" isn't an exit.

Week ahead – Fed countdown begins amid US inflation data and geopolitical risks

Fed Chair Warsh’s first meeting approaches as key US inflation data could reshape expectations. Oil prices remain elevated as US-Iran talks continue; tariffs also return to the spotlight. ECB is expected to hike; will it be a one-off move or is July live?

The US economy defies the rules: 100 days into the Oil shock and the recession signal is still missing

More than three months after the start of the Iran war and the resulting disruption to global energy markets, the US economy continues to display remarkable resilience. The conflict has triggered a sharp rise in Oil prices, reignited inflationary pressures and fueled widespread concerns about a potential economic slowdown.