- Gold price may hover below $1,900 as investors will focus on US inflation.
- Higher US NFP has bolstered the odds of a jumbo rate hike in June.
- US inflation is seen lower at 8.1% against the prior print of 8.5%.
Gold Price (XAU/USD) is expected to open flat on Monday and will likely perform lackluster on galloping catalysts that favor a rate hike by the Federal Reserve (Fed) in June. Inflation will persist longer on account of higher fossil fuel prices and costly commodities due to the multiplier effects of helicopter money and the Russia-Ukraine war. Now, the upbeat US Nonfarm Payrolls (NFP) has reinforced the chances of a jumbo rate hike by the Fed in June.
The US central bank elevated its interest rate by 50 basis points (bps) in May to tame the multi-decade inflation. Now, solid job additions in the US economy at 428k, much higher than the consensus of 391k have bolstered one more 50 bps rate hike in June. The Unemployment Rate remained unchanged at 3.6%, and according to the report, it was led by gains in leisure, hospitality, manufacturing, transportation, and warehousing.
It looks possible that a tight labor market will raise the Labor Price Index and higher earnings by the household will lead to a much higher inflation print in the US economy and eventually will impact the gold prices.
This week, the US inflation will remain in focus, which is expected to land at 8.1% against the prior print of 8.5% on yearly basis. A lower inflation print may dent the odds of a jumbo rate hike but broad-based inflation is still higher, which demands one more mega rate hike.
Gold technical analysis
The precious metal is forming a symmetrical triangle chart pattern on an hourly scale, which signals indecisiveness in the sentiments of the market participants. The 20-period Exponential Moving Average (EMA) at $1,882.16 is overlapping with prices, which signals a consolidation ahead. Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a 40.00-60.00 range, which advocates a directionless move.
Gold hourly chart
-637876435501530190.png)
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 stays defensive below 0.6500 ahead of Fed
AUD/USD is on the back foot below 0.6500, consolidating the previous decline early Wednesday. China's holiday-led thin conditions and pre-Fed policy decision caution trading leave Aussie traders on the edge.
USD/JPY holds higher ground near 158.00, Fed in focus
USD/JPY holds the rebound near 158.00 in Asian trading on Wednesday. The US Dollar remains on the bid amid a risk-off market environment, underpinning the major. The interest rate differential between Japan and the US is likely to maintain a bullish pressure on the pair ahead of the Fed decision.
Gold pullbacks on rising US yields, buoyant US Dollar as inflation heats up
Gold prices drop below the $2,300 threshold on Tuesday as data from the United States show that employment costs are rising, thus putting upward pressure on inflation. XAU/USD trades at $2,296 amid rising US Treasury bond yields and a stronger US Dollar.
Bitcoin price dips into $60K range as spot traders flock to Coinbase Lightning Network
Bitcoin price slid lower on Tuesday during the opening hours of the New York session, dipping its toes into a crucial chart area. It comes as markets continue to digest the performance of Hong exchange-traded funds after their first day of issuance.
Federal Reserve meeting preview: The stock market expects the worst
US stocks are a sea of red on Tuesday as a mixture of fundamental data and jitters ahead of the Fed meeting knock risk sentiment. The economic backdrop to this meeting is not ideal for stock market bulls.