- As trading began this week, gold prices rose close to $2,360 per ounce.
- Gold prices traded at their highest levels in three weeks, supported by expectations of an interest rate cut by the US Federal Reserve following the country’s weak employment numbers.
Last week, economic data showed a higher-than-expected increase in jobless claims, pointing to a slowing labor market. Recently, the price of gold has posted weekly gains of around 3%, bringing its 2024 rise to around 15%. In the same performance, prices of sister commodity silver pared most of its gains to close the trading week, despite holding steady above $28 per ounce. The white metal will enjoy a weekly increase of 6.3% and reach almost 19% year-over-year.
Meanwhile, this has led investors to predict that the US Federal Reserve will begin easing monetary policy in September. Traders are now preparing for April consumer price index (CPI) and producer price index (PPI) releases expected this week to gain more clarity on the Fed’s monetary direction, considering concerns expressed by several Fed officials about easing. Follow DailyForex to stay updated on the latest events in the Forex market.
Will the US Federal Reserve lower interest rates?
Despite some panic among a group of monetary policymakers, the futures market is confident the U.S. central bank will pull the trigger on cutting interest rates twice this year, starting in September.
Meanwhile, rising tensions in the Middle East continued to enhance the appeal of a safe haven. On Sunday, Israel deployed its tanks east of Jabalia, north of the Gaza Strip, after a night of intense air and ground bombardment.
On another level, U.S. stock futures remained little changed on Monday as investors braced for key U.S. inflation data this week to gain insights into the direction of the Federal Reserve’s monetary policy, according to stock trading firms’ platforms. The Dow Jones rose 0.32% on Friday, rising for an eighth straight session and recording its best week of the year. Recently, the S&P 500 rose 0.17%, while the Nasdaq Composite fell 0.03%. As a result, these moves came as investors responded to a series of comments from the US central bank, with several Federal Reserve officials calling for a cautious stance on cutting interest rates.
US inflation has been rising in recent months and Wednesday’s April inflation reading will give markets a real test of what the Fed’s next move might be. However, US Federal Reserve Chair Jerome Powell has said last month that the US central bank’s next move probably won’t be to raise interest rates. Wall Street markets have also found support from a strong earnings season, with around 80% of companies reporting results so far beating market expectations.
Gold Price Forecast and Analysis Today:
As already mentioned, rising global geopolitical tensions and further gold buying by central banks will support bulls in pushing the gold price towards stronger upside levels, with the closest resistance levels currently at $2375 and $2400 for ounce respectively. Regardless of the outcome of this week’s US inflation data, buying gold from any dip level will remain the best trading strategy.
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