- At the end of last week’s trading sessions, gold futures managed to post some gains, as financial markets shrugged at the latest inflation data.
- Despite widespread expectations that the US Federal Reserve will keep interest rates high for longer, stocks reflected Thursday’s selling pressure and the question arises: is gold about to return to $2400 USD an ounce?
According to gold trading broker platforms, prices rose to the resistance level of $2,352 USD per ounce on Friday before settling around $2,333 USD at the start of an important and eventful week. The price of the yellow metal was on pace to post a 2.2% weekly decline, but continues to rise nearly 14% since the start of 2024.
Likewise, prices of silver, gold’s sister commodity, rose above $27 USD per ounce. Overall, silver also saw a weekly decline of 4.3%. However, like gold, silver prices have increased about 15% since the beginning of the year.
Attention on the CPI, Analysis of American Inflation
In general, all attention has been focused on the US Federal Reserve’s favorite inflation indicator: the Consumer Price Index (CPI). In economic calendar news, the personal consumer price index (PCE) rose more than expected to 2.7% in March, up from 2.5% in February, according to the Bureau of Economic Analysis (BEA ). The market was expecting a reading of 2.6%. In monthly terms, the personal consumption inflation rate increased by 0.3%, unchanged compared to the previous month and in line with market expectations.
The core consumer price index (CPI), which excludes market volatility in the food and energy sectors, remained at 2.8%, but exceeded the agreed upon estimate of 2.6%. Recently, the core PCE price index increased 0.3% from February to March. In three months, the core PCE price index rose 4.4%. Furthermore, the inflation rate of basic personal consumption, excluding housing, increased to 3.5% annually and 0.4% monthly.
In other economic data, personal spending rose 0.8% for the second straight month, beating market expectations of 0.6%. Personal incomes increased 0.5%, compared to the expected 0.3%. Additionally, the personal savings rate fell from 3.6% to 3.2%. Despite the latest indicators pointing to a second wave of inflation and a longer period of rising interest rates, investors remained calm as major indices rose as high as 1.85%.
Meanwhile, this supported the gold market, as the US Treasury bond market weakened, even as the dollar’s strength capped gains. U.S. Treasury bond yields fell generally, with the 10-year bond yield falling 5.3 basis points to 4.65%. Additionally, the 2-year bond yield fell below 4.99%, while the 30-year bond yield fell below 4.77%.
Another factor affecting the price of the ,60. Obviously, a stronger dollar tends to push down gold prices, as it makes it more expensive for foreign investors to purchase. Meanwhile, the futures market is now pointing to a cut in US interest rates of just a quarter point this year, according to CME’s Federal Reserve tracker.
On the other hand, this also supported the gold market, as the government bond market weakened, although the strength of the US dollar limited the gains. U.S. Treasury bond yields fell generally, with the yield on the 10-year bond falling 5.3 basis points to 4.65%. Additionally, the two-year bond yield fell below 4.99%, while the 30-year bond yield fell below 4.77%. Related to this, inform yourself about other commodities such as the price of coffee today and make informed decisions in the currency market.
Gold Price Forecast and Analysis Today
In today’s trading outlook, according to the behavior in the attached daily Forex chart, the price of gold continues to try to avoid new losses, and the bulls’ success in returning near the resistance levels of $2,385 USD and $2,420 USD the ounce is possible in case the price of the US dollar decreases following the announcement of the US Federal Reserve and US employment data. In addition to the increase in global geopolitical tensions and the increase in gold purchases by central banks. On the other hand, it is possible to break the $2,300 USD per ounce level if the dollar continues to strengthen and investors’ risk appetite increases.
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