Next week : The week ahead is mostly taken up by US centric data (see economic calendar below) including the core PCE print which is the Fed’s preferred measure of inflation. Mr. Powell is scheduled to speak again and is likely to continue on his policy tightening path as opposed to a rate hold as money market probabilities move ever closer to a 25bps hike in July. Other key releases include durable goods orders, GDP and Michigan consumer sentiment that will allow for a more clearer picture of the broader US economy. Should data point to a slowing economy, recessionary fears may creep back in and could play into the hands of the safe haven Gold
Analysis :
- Inflation and tightening of monetary policy: If the core PCE print (the Fed's preferred measure of inflation) exceeds expectations or the Fed decides to continue tightening monetary policy, this could create pressure gold price drop. This happens because higher inflation and rising interest rates can reduce the real value of gold and increase the appeal of other investment options.
- Macroeconomic data: If GDP and durable goods orders data shows that the US economy is slowing down, this could create an uncertain situation and fears of a recession. In this situation, investors can seek safe havens like gold, thereby increasing the value of gold.
- Consumer Sentiment: Michigan Consumer Sentiment provides information on consumer confidence in the future. If consumer sentiment declines, consumers may become insecure and limit consumption. This can put pressure on the economy and create recession concerns, increasing the potential for gold to rise.
In short: gold is likely to go up
Analysis :
- Inflation and tightening of monetary policy: If the core PCE print (the Fed's preferred measure of inflation) exceeds expectations or the Fed decides to continue tightening monetary policy, this could create pressure gold price drop. This happens because higher inflation and rising interest rates can reduce the real value of gold and increase the appeal of other investment options.
- Macroeconomic data: If GDP and durable goods orders data shows that the US economy is slowing down, this could create an uncertain situation and fears of a recession. In this situation, investors can seek safe havens like gold, thereby increasing the value of gold.
- Consumer Sentiment: Michigan Consumer Sentiment provides information on consumer confidence in the future. If consumer sentiment declines, consumers may become insecure and limit consumption. This can put pressure on the economy and create recession concerns, increasing the potential for gold to rise.
In short: gold is likely to go up
Comment:
Gold rose above $1,920 an ounce on Monday, rebounding further from three-month lows as global economic uncertainties and political instability in Russia drove some safe-haven demand for the metal.
