Gold Price Forecast: XAU/USD to have little reason to move significantly higher anytime soon – TDS

FXStreet Insights Team FXStreet

Gold fell last week as investors bet on further rate hikes by the Fed. Economists at TD Securities analyze XAU/USD outlook.

High probability of another 25 bps in late-July

Investors are worried that a lack of economic weakness in the US and core inflation trending more than double the US central bank's inflation target will force policymakers to deliver on additional rate hikes in the coming months. Indeed, the futures market is pricing a high probability of another 25 bps in late July.

While there are fewer price pressures in the economy, recent data suggest that rates will move higher on the front end of the curve and stay at elevated levels for some time, which implies that Gold will continue to have little reason to move significantly higher anytime soon.

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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.

EUR/USD struggles to regain momentum in the low1.1600s

EUR/USD is giving some signs of life in the aftermath of two severe days of losses on Wednesday, reclaiming the 1.1600 hurdle and above on the back of the resurgence of a mild selling bias around the US Dollar. Moving forward, the usual US weekly Claims will take centre stage on Thursday ahead of Friday’s crucial NFP data.

GBP/USD appears bid around 1.3370

GBP/USD reverses part of its recent multi-day decline, gathering some balance and managing to reach the 1.3400 region, where some initial resistance seems to have turned up. Cable’s uptick comes in response to some loss of momentum in the Greenback despite the geopolitical scenario remaining fragile.

Gold recovers modestly despite intensifying Middle East crisis

Gold keeps its daily gains well in place, although a break above the $5,200 mark per troy ounce still remains elusive on Wednesday. The yellow metal’s rebound comes in response to the persistent flight-to-safety amid intense geopolitical tensions in the Middle East and the bearish performance of the US Dollar.