Market Overview
Gold (XAU/USD) remains in positive territory on Tuesday, despite a weaker US Dollar. The recent stronger-than-expected US Purchasing Managers Index (PMI) has led Federal Reserve officials to delay the timing of the first interest rate cut this year, which has limited gold’s upside. However, safe-haven flows driven by geopolitical tensions in the Middle East and Ukraine may support the yellow metal in the near term.
Key Fed Speeches and Economic Data to Watch
Investors are closely watching speeches from Federal Reserve members Lisa Cook and Michelle Bowman on Tuesday. Critical US economic data to monitor this week includes the final reading of the US Gross Domestic Product (GDP) for Q1 on Thursday and the Personal Consumption Expenditure (PCE) Price Index for May, due on Friday. Any signs of easing inflation could raise expectations for Fed rate cuts later in 2024, potentially weakening the Greenback and benefiting USD-denominated gold.
San Francisco Federal Reserve Bank President Mary Daly remarked on Monday that she does not foresee the Fed cutting rates until there is clear evidence that inflation is trending towards 2%. Daly noted, “While the labor market remains strong, it may face rising unemployment if inflation persists.”
According to the CME FedWatch Tool, traders are now pricing in a 66% chance of a Fed rate cut in September, up from 59.5% at the end of last week. The final reading of the US headline and Core PCE Price Index is expected to show a year-over-year increase of 2.6% in May.
Short-term Forecast
Gold (XAU/USD) remains supported by safe-haven flows amid geopolitical tensions. Despite a stronger-than-expected US PMI, gold trades positively at $2,324.43, reflecting cautious optimism in the market.
Gold Prices Forecast: Technical Analysis
Gold is trading at $2324.43 with key levels to watch, including the pivot point at $2331.62. Immediate resistance is at $2341.56, $2353.36, and $2368.39. Support levels are $2317.44, $2309.92, and $2299.06.
The 50-day Exponential Moving Average (EMA) is at $2331.72, and the 200-day EMA is at $2332.28, indicating a bullish trend above these levels. Gold remains bullish above $2317.
A break below this level could trigger a sharp selling trend. Traders should monitor these key levels closely for informed decision-making.
