EUR/USD 1.12498
0.216%
Gold 3329.54
0.715%
Oil 60.841
1.532%
USD/JPY 145.208
-0.491%
GBP/USD 1.32781
0.249%
GBP/JPY 192.812
-0.213%
Browse More
  • English
  • 简体中文
  • 繁體中文
  • Tiếng Việt
  • ไทย
  • Indonesia
Subscribe
Real-time News
Federal Reserve Board Governor Kugler: First quarter GDP shows that the real side of the economy is resilient.Federal Reserve Board Governor Kugler: Our current monetary policy stance is moderately tight.On May 9, European Commission President Ursula von der Leyen said that once a specific trade plan is on the table, she could envision visiting Washington to meet with Trump to discuss trade negotiations. "If I go to the White House, I hope there is a package that we can discuss," von der Leyen said. "It has to be specific, and I hope there is a solution that we can both agree on. Thats what were working on now." Last month, von der Leyen met briefly with Trump at Pope Francis funeral, but a formal meeting has not yet taken place. On Thursday, the European Commission announced that if trade negotiations with the United States fail to produce satisfactory results, the EU will impose additional tariffs on 95 billion euros of US exports. Von der Leyen said on Friday that the EU prefers to resolve the issue through negotiations to avoid tariff escalation, but is developing countermeasures that can be implemented if a "satisfactory result" cannot be reached.On May 9, ECB board member Simkus said that since the eurozone economy has not yet felt the full impact of US tariffs, inflation is expected to continue to slow, but the ECB must further lower interest rates. He said that although economic activity performed well at the beginning, recent geopolitical trends, including US President Trumps trade threats, are bad news. At the same time, he saw "clear anti-inflationary forces" at work. He said, "For me, the June decision was very clear that another rate cut was needed." He said, "It is possible to cut interest rates again after June," although the timing is unclear. The ECB has cut interest rates seven times since June last year, and officials have said they are ready to take more measures as US tariffs threaten economic growth.Federal Reserve Board Governor Kugler: It is not appropriate to use a single indicator to guide the maximum employment target.

Gold Price Forecast: XAU/USD Consolidates Below Critical Support

Larissa Barlow

Apr 13, 2022 10:22

  • The gold market is reversing some of Tuesday's positive impetus.

  • Despite the Core CPI shortfall, the US dollar remains strong.

  • Ukraine's geopolitical danger is bolstering gold, and Putin is ratcheting up the pressure.

 

The gold price surged on Tuesday and is consolidating in early Asian markets on Wednesday, following another sharp increase in US inflation announced in the early hours of New York trading. The XAU/USD currency pair is now trading at $1,963.03, down 0.18 percent from a top of $1,968.06 to a low of $1,962.95.

 

Core CPI missed projections, implying that the Federal Reserve may not be in as much of a rush as the market has implied. Core prices, which exclude food and energy, increased by just 0.3 percent, below estimates of 0.5 percent and marking the weakest gain since September.

 

However, the US dollar rallied strongly again against the backdrop of falling US shares, reversing the relief bounce as money markets continue to price in a hawkish Fed. On Tuesday, the US Treasury's 10-year auction reached a high yield of 2.72 percent, up from the previous month's high of 1.92 percent. With inflation expectations staying largely stable, if the 10-year yield continues to rise beyond this week's 2.836 percent highs, it will test the October 2018 high above 3.26 percent.

 

Fed officials are likely to maintain their hawkish stance. In aggregate, this data is unlikely to alter the Federal Reserve's near-term assessment of the need for rate hikes. "Fed governor Brainard (governors always vote) reaffirmed the FOMC's priority of containing inflation," a Westpac analyst explained. "She anticipates some tightening of financial conditions to assist temper demand, along with some loosening of supply limitations, all of which will contribute to lower inflation. She lauded the March CPI report's reduction in core goods prices, but cautioned against putting too much faith in a single piece of data."

 

As a result, a 50 basis point boost next month is expected to put the US dollar on pace for a March 2020 high near 103 as assessed by the DXY. It has already printed a new daily cycle high of 100.333.

 

Meanwhile, gold continues to benefit from elevated geopolitical threats, which Russian President Vladimir Putin has ratcheted up.

 

The US is expected to announce an additional $750 million in arms for Ukraine.

 

Putin stated on Tuesday that peace negotiations with Ukraine had reached a stalemate. Rather than that, Putin pledged that Russia will accomplish all of its "noble" objectives in Ukraine. "We have once again found ourselves in a dead-end scenario," Putin said during a news conference during a visit to the Vostochny Cosmodrome 3,450 miles (5,550 kilometers) east of Moscow.

 

"We have no intention of remaining isolated," Putin stressed. "Isolating someone severely in the modern world - let alone a country the size of Russia - is impossible."

 

This should help to keep gold prices stable in 2022.

Technical Analysis of Gold

Since mid-March, the gold price has been range-trading, and if this is accumulating the 2022 surge, the price may now be ripe for a positive continuation, as indicated by the daily chart:

 

image.png 

 

We have witnessed an effort to break out, but naturally, a retreat is coming, and it is now a matter of how far the bullish impulse can be mitigated before bulls re-enter. However, if the US currency remains strong, $1,930 may come under renewed pressure, and if it does, the near-term possibilities for a move higher will be substantially diminished.

Suggestion