The gold market suffered its first monthly loss since February. In May, there was a decrease of $ 36. Markets are now wondering what will happen in a new moon. The focus is on the debt ceiling problem. Congress voted at the meeting. The problem is gone for now. In addition, there are different opinions about the interest rate increase. A shady decision is now awaited. Accordingly, there is a possibility of a pause.
Market discussions
Edward Moya, senior market analyst at OANDA, emphasizes resistance. Despite resistance, eventually Congress passes the law. However, expectations are rising that the US will avoid defaulting. A debt deal for gold doesn’t necessarily mean lower prices, Moya said in a note Wednesday. There are more significant risks to the gold price.
With market expectations changing sharply in recent weeks, it is a matter of curiosity what the Fed will do in June and July. At the time of writing, the CME FedWatch Tool predicted a 70% chance of a break at the June meeting. The market headed for another 25 basis points gain just a few trading sessions ago. This puts pressure on the gold price.
Fed speakers trigger repricing
Expectations changed as several Fed speakers turned to pause or skip a rate hike in June. The latest developments therefore mean a reversal of previous hawkish sentiments. Philadelphia Fed President Patrick Harker said on Wednesday he supports a “pause” in rate hikes. Harker emphasizes that he is seriously considering taking a break. On the other hand, he says he will focus on Friday’s employment data. The data will give direction to his opinion. Fed Chairman and vice-presidential candidate Philip Jefferson also said it makes sense to skip a rate hike as it gives policymakers time to review more data. The stagnation reflects positively on the gold price.
At a financial stability conference in Washington, Jefferson said, “Taking a break from rate hikes at an upcoming meeting allows the (Federal Open Market) Committee to see more data before deciding on the scope of additional policy tightening.” uses the phrase. But not all Fed officials share this view. Loretta Mester, Chairman of the Federal Reserve Bank of Cleveland, takes the contrary view. Accordingly, she says there is no “compelling” evidence not to raise interest rates. Meanwhile, macro data releases supported further tightening by the US central bank. The Federal Reserve’s preferred measure of inflation – the annual core PCE price index rose to 4.7% in April versus the consensus forecast of 4.6%. The latest JOLTS job postings data showed that the labor market remains tight. All eyes are on the US April nonfarm payrolls report, scheduled for release on Friday. Now everyone is wondering about the direction for gold.
direction for gold
Gold tested record highs in early May. After that, he could not keep the peaks. However, analysts say that gold is trading above $1,950 an ounce is a good sign. However, Kinesis Money market analyst Rupert Rowling said the risk of a drop back to $1,900 remains. Rowling notes that attention is rapidly focusing on US employment data. It’s also looking at the Federal Reserve’s mid-month meeting to decide the June rate. Finally, it focuses on the inflation data that will be released before this meeting.
cryptocoin.com Looking at it on an outlook, August Comex gold futures were trading at $1,981.20, up 0.21% on the day. Gold price rebounded after falling to a two-month low. Crédit Agricole strategists revised their Gold price forecasts upwards for 2024. There are three factors behind the revised look. The first is the debt ceiling debate. Political risks in the USA and a possible recession. At this point, analysts expect $2,050 in gold price for the first quarter of 2024. The expectation for the end of 2023 is 2,000 dollars.
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