Gold Steadied As Investor Focus Turns To U.S. Inflation Data

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Gold Steadied As Investor Focus Turns To U.S. Inflation Data
Credit: © Reuters.

Gold prices settled up by 0.14% at 66114 as investor attention shifts towards upcoming U.S. inflation data, crucial for gauging the Federal Reserve's stance on interest rates. Despite recent high inflation readings, Fed policymakers remain committed to reducing interest rates by three-quarters of a percentage point by the end of 2024. Chicago Fed Bank President Austan Goolsbee's projection of three rate cuts this year reflects a cautious approach to monetary policy, echoed by Fed Governor Lisa Cook's emphasis on careful decision-making.

Investors are eagerly awaiting the U.S. core personal consumption expenditure price index data, which is expected to maintain an annual pace of 2.8%, providing further insights into the Fed's potential actions. With a 70% probability of rate cuts beginning in June, according to the CME Group's (NASDAQ: CME ) FedWatch Tool, market sentiment is sensitive to economic indicators shaping monetary policy expectations. In the commodities market, COMEX gold speculators reduced their net long positions, reflecting a nuanced stance amid evolving market dynamics. Swiss gold exports in February saw a decline from an eight-year high, with a notable increase in exports to India, driven by demand ahead of the wedding season.

From a technical perspective, gold experienced short covering as evidenced by a drop in open interest by -22.44% to settle at 6055, coupled with a price increase of 92 rupees. Currently, gold finds support at 65850, with potential testing of 65585 levels below, while resistance is anticipated at 66410, with the possibility of prices reaching 66705 upon surpassing this level.

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