- Gold was drifting along between $1,191/oz and $1,198/oz.
- We have PPI and CPI releases and higher than expected CPI will only underpin the case for higher rates from the Fed.
Spot gold was drifting along between $1,191/oz and $1,198/oz in European and U.S. markets while the DXY slid from 95.56 to 95.03. There has been little go on but eyes are looking ahead to an impending rate hike from theFed this month, US inflation data at the end of the week. At the same time, trade tensions are simmering away on the backburner - leaving the outlook for gold somewhat vulnerable on the prospect for a stronger greenback.
The greenback can take its cues from the data this week. We have PPI and CPI releases and higher than expected CPI will only underpin the case for higher rates from the Fed - Other important U.S. data in the week ahead include the JOLTS jobs, real weekly earnings, retail sales and industrial production. Markets will also be looking for updates with respect to the U.S. imposing tariffs on an additional $200 billion of imports from China. When markets start to price in the additional $267 billion that President Trump threatened on Friday, just hours before China reported another record trade surplus with the U.S, one might expect additional gains in the greenback.
Federal Reserve risks
With respect tot he Federal Reserve, analysts at Nomura explained that at this point, it would be a significant surprise if the FOMC did not raise interest rates at the upcoming September meeting:
"The economy has remained strong while recent FOMC minutes and participant comments all point to another step in removing the accommodative policy . . ."We continue to expect two more rate hikes in 2018, one in December after the expected hike in September, and two hikes in 2019, in March and September, as the FOMC continues to navigate between the shoals outlined by Powell."
Gold levels
- Gold Technical Analysis: Bull flag hanging above $1,190.00 a troy ounce still looking at 1,226.00 target
A break of $1,200, ahead of $1,207 (last week high) comes before $1,215. To the downside, $1,190 and $1,182 (Aug 23 low).
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 stands firm above 0.6500 with markets bracing for Aussie PPI, US inflation
The Aussie Dollar begins Friday’s Asian session on the right foot against the Greenback after posting gains of 0.33% on Thursday. The AUD/USD advance was sponsored by a United States report showing the economy is growing below estimates while inflation picked up. The pair traded at 0.6518.
EUR/USD mired near 1.0730 after choppy Thursday market session
EUR/USD whipsawed somewhat on Thursday, and the pair is heading into Friday's early session near 1.0730 after a back-and-forth session and complicated US data that vexed rate cut hopes.
Gold soars as US economic woes and inflation fears grip investors
Gold prices advanced modestly during Thursday’s North American session, gaining more than 0.5% following the release of crucial economic data from the United States. GDP figures for the first quarter of 2024 missed estimates, increasing speculation that the US Fed could lower borrowing costs.
Bitcoin price continues to get rejected from $65K resistance as SEC delays decision on spot BTC ETF options
Bitcoin (BTC) price has markets in disarray, provoking a broader market crash as it slumped to the $62,000 range on Thursday. Meanwhile, reverberations from spot BTC exchange-traded funds (ETFs) continue to influence the market.
Bank of Japan expected to keep interest rates on hold after landmark hike
The Bank of Japan is set to leave its short-term rate target unchanged in the range between 0% and 0.1% on Friday, following the conclusion of its two-day monetary policy review meeting for April. The BoJ will announce its decision on Friday at around 3:00 GMT.