After yesterday’s erratic trading session, when the precious metal briefly surpassed $2050 before undergoing a severe sell-off and finishing in the red, gold prices have stabilized. Gold lost more ground this morning as the Dollar Index (DXY) hit a brand-new one-week high. Gold has unable to firmly climb over the $2050 mark despite mounting concerns about a global recession, and technical signs point to a negative prognosis.
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Market players responded favorably to yesterday’s US CPI data, and a pause in Fed rate hikes is currently expected in 94% of cases. The US Dollar is being driven by the consensus on rate reduction in the second half of 2023, which is causing uncertainty in gold’s movements. Furthermore, the mixed findings of the Chinese inflation report did little to strengthen the price of gold.
There are still ongoing worries regarding the strength and speed of the Chinese recovery, which might make gold prices even less secure. On the other hand, rising concerns about a worldwide recession might boost gold prices in the future.
There aren’t many market-moving events on the docket for today, but the US PPI report might be of interest. The prospect of an increase or further drop in US inflation in the coming months will be revealed by producer price rises, which may influence the DXY and gold prices.
Yesterday’s US CPI data was viewed positively by market participants, with a 94% probability of a pause in Fed rate hikes now priced in. However, the consensus on rate cuts in the second half of 2023 remains a point of contention, which is driving the US Dollar and creating uncertainty in gold’s movements. Additionally, Chinese inflation data, which showed mixed results, did not provide much support for gold prices.
There are continued concerns about the speed and strength of the Chinese recovery, which may add further uncertainty to gold prices. However, if global recessionary fears increase, this could weigh positively on gold prices in the future.
Today’s calendar does not offer much in terms of market-moving events, but the US PPI report may be of interest. Producer price increases will provide insight into the possibility of a rise or further declines in US inflation in the months ahead, potentially leading to movement in the DXY and gold prices.
The US CPI data released yesterday was seen favorably by market players hoping for a Fed rate hike delay, markets currently factor a 94% chance of a pause. However, the US Dollar is still being driven by disagreement over the consensus on rate decreases in the second half of 2023, and reflecting the uncertainty in gold prices of late with whipsaw price movements. Chinese inflation data came in mixed, with headline CPI rising by only 0.1% rate in April, missing forecasts of 0.4%. Chinese PPI data contracted for the seventh consecutive month, adding further uncertainty to the speed and strength of the Chinese recovery.
There is not much on the calendar today, today’s calendar, but US PPI is probably going to be of interest. The possibility of a rise or further decreases in US inflation in the next months will be revealed by producer price hikes, which may cause some fluctuation in the DXY and consequently Gold. A ramp-up in global recessionary fears will weigh positively on gold prices moving forward. The series of events has led to a precarious situation for gold at the moment, with investors keeping a watchful eye on the markets.
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