Gold Price Forecast: XAU/USD may have bottomed out at the beginning of the week – Commerzbank

FXStreet Insights Team FXStreet

Gold price shed more than 5% in February. XAU/USD is currently trading at a good $1,840, which puts it around $40 or 2% higher than on Tuesday. It appears that the yellow metal has bottomed out, strategists at Commmerzbank report.

There is no longer any expectation of rate cuts this year

“Weighing on Gold was a combination of an appreciating USD and sharply rising bond yields due to a massive upward correction of US interest rate expectations.”

“By the end of the month the expected rate peak had been pushed back into the autumn – what is more, it is now set to total almost 5.5%, which is around 70 bps higher than envisaged at the start of the month. Moreover, there is no longer any expectation of rate cuts this year.”

“The price increase seen this week despite even higher interest rate expectations could indicate that the correction of the gold price is more or less complete and that the price may have bottomed out at the beginning of the week.”

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.

GBP/USD trims gains, hovers around 1.3520 on US CPI data

GBP/USD adds to the weekly move higher and keeps the trade above the 1.3500 threshold on Wednesday. Cable’s extra recovery follows the modest selling pressure on the Greenback after US CPI readings matched consensus in July.

EUR/USD retargets 1.1550 on US inflation

EUR/USD picks up some traction and flirts with the 1.1550 region on Wednesday. The pair’s modest advance comes as the US Dollar gathers some steam after US CPI data matched estimates last month.

Gold clings to gains above $4,400 post-US CPI

Gold reverses the recent weakness and reclaims the area past the $4,400 mark per troy ounce on Wednesday. The precious metal’s recovery picks up pace and exceedes the $4,400 level in the wake of the release of in-line US inflation figures in July and the marginal gains in the US Dollar.

Zcash below $500 puts bulls under pressure, 100-day EMA in focus

Zcash price trades below $500 at press time on Wednesday, holding steady after two consecutive days of losses. Retail demand for the privacy coin is mixed as the broader market awaits the release of US Consumer Price Index data for July later in the day.

US CPI data set to show softer inflation in July as markets reassess Fed rate hike bets

The US Bureau of Labor Statistics will publish the July Consumer Price Index data on Wednesday. The report is expected to show a small decline in consumer inflation and core inflation. The monthly CPI is forecast to rise by 0.1%, following the 0.4% decrease recorded in June, while the annual reading is seen retreating to 3.4% from 3.5% reported in the previous month.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.