XAU/USD heading towards its all-time high after softer US CPI
Diupdate
Gold (XAU/USD) jumped almost 2% on Thursday after softer-than-expected US inflation was announced. The precious metal, which had been building gains for the past two weeks, saw increased buying interest as markets took the softer CPI reading as a step closer to rate cuts.
Earlier in the week, Fed governor Jerome Powell said that whilst the labour market had shown significant signs of cooling, inflation was still a way away from the 2% target, which would not allow the central bank to start cutting just yet. Further evidence of a sustainable return to that target would be needed. Well, Thursday’s CPI data seemed to be enough evidence for markets, which caused a rate-cut-positive reaction in markets; dollar and yields down, equities and gold higher.
But, despite the exuberance in the initial reaction, there has been no official confirmation from FOMC members that the data has indeed proven enough weakness in price pressures to guarantee a rate cut. This seems to be the thought process on Friday morning as some of those gains have been retraced both in equities and gold.
XAU/USD is hovering just above $2,400 at the time of writing after encountering resistance at $2,424 on Thursday. The path of the least resistance remains higher with the 20-day SMA attempting to break back above the 50-day SMA, which would reinforce the bullish appetite. Further resistance could arise between $2,430 and $2,450, which is its all-time high.
The metal remains exposed to upside risks and further confirmation of a potential rate cut in September would enable further upside. Markets are currently pricing in a 90% chance of this happening. That said, we could see FOMC members, including Governor Powell, pushing back on some of the market optimism around rate cuts, in order to instill some caution. If this were the case, we could see gold retrace slightly but the momentum is likely to remain bullish regardless.
Earlier in the week, Fed governor Jerome Powell said that whilst the labour market had shown significant signs of cooling, inflation was still a way away from the 2% target, which would not allow the central bank to start cutting just yet. Further evidence of a sustainable return to that target would be needed. Well, Thursday’s CPI data seemed to be enough evidence for markets, which caused a rate-cut-positive reaction in markets; dollar and yields down, equities and gold higher.
But, despite the exuberance in the initial reaction, there has been no official confirmation from FOMC members that the data has indeed proven enough weakness in price pressures to guarantee a rate cut. This seems to be the thought process on Friday morning as some of those gains have been retraced both in equities and gold.
XAU/USD is hovering just above $2,400 at the time of writing after encountering resistance at $2,424 on Thursday. The path of the least resistance remains higher with the 20-day SMA attempting to break back above the 50-day SMA, which would reinforce the bullish appetite. Further resistance could arise between $2,430 and $2,450, which is its all-time high.
The metal remains exposed to upside risks and further confirmation of a potential rate cut in September would enable further upside. Markets are currently pricing in a 90% chance of this happening. That said, we could see FOMC members, including Governor Powell, pushing back on some of the market optimism around rate cuts, in order to instill some caution. If this were the case, we could see gold retrace slightly but the momentum is likely to remain bullish regardless.
Catatan
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84.01% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
The information provided is not to be considered investment advice or investment research. Capital.com will not be liable for any losses from the use of the information provided.'
Pernyataan Penyangkalan
Informasi dan publikasi tidak dimaksudkan untuk menjadi, dan bukan merupakan saran keuangan, investasi, perdagangan, atau rekomendasi lainnya yang diberikan atau didukung oleh TradingView. Baca selengkapnya di Persyaratan Penggunaan.