Gold Testing Highs
Gold prices are testing record highs this week as traders brace for a slew of US data in coming days. The safe-haven metal has been well supported through recent sessions, benefiting from the ongoing lull in the Dollar and the broad pick up in markets on the back of heavy selling at the start of last week. With Fed easing expectations back in focus, gold prices look poised for a breakout higher this week if we see fresh USD weakness in response to any US data weakness.
US Data on Watch
Today, US PPI will be on watch, expected to have cooled slightly last month, ahead of headline CPI data tomorrow. With traders now pricing in two cuts this year, gold bulls will be hoping for a fresh CPI downside to keep USD pressured. The risk is that if CPI comes in above forecast tomorrow, this could dilute easing forecasts beyond September, leading to a recovery in USD, putting pressure on gold prices.
Safe-Haven Inflows
Away from USD expectations, gold prices remain well supported through safe-haven inflows. With uncertainty around the ongoing violence in the Middle East elevated and with the Russia – Ukraine conflict showing no signs of stopping, safe-haven demand remains a key driver for gold and is expected to remain while these conflicts continue.
Technical Views
Gold
For now, gold prices are stalled at the 2,483.27 level, capped by the bull channel highs. With momentum studies bullish, focus remains on a continuation higher while prices holds above the 2,364.93 level. Only a break below that level will negate the bullish view, turning focus to deeper support at 2,275.43.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.