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On July 14th, Federal Reserve Governor Waller stated on Monday that if future data indicates inflation remains well above the 2% target, the Fed may need to raise interest rates "in the near term." He described current monetary policy as being at a "crossroads." Waller indicated that this direction will be determined by new information, such as Tuesdays CPI report, and that if the data shows unfavorable trends, the Fed should not "slacken" its efforts. Waller stated, "At current policy levels, inflation could still gradually fall back to the 2% target. But I am equally concerned about the possibility of another similar scenario, where data in the coming weeks shows inflation remaining high or even continuing to rise, which would require a tighter monetary policy in the near term." He specifically expressed concern that recent inflation reports suggest price pressures appear to be expanding across the economy, exceeding the impact of last years import tariff increases or recent energy cost increases, potentially reflecting broader systemic inflation, which would require a tighter monetary policy. Waller stated, "If core inflation is hot again this week, the FOMC will have to consider tightening monetary policy in the near term. It will take several months to see inflation data consistently declining before we can conclude that inflation is moving in the right direction."The market expects the probability of a Federal Reserve rate hike this month to have risen to 50%.U.S. short-term interest rate futures indicate that the probability of a Federal Reserve rate hike in July is about 45%, up from 35% earlier on Monday.Federal Reserve Governor Waller: Consumer spending is expected to continue to grow strongly, and investment in artificial intelligence will remain robust.Federal Reserve Governor Waller: If it is reasonable for core inflation to continue to decline, I will continue to support keeping interest rates unchanged.

Predictions for Gold Prices — Gold prices rose as the dollar weakened

Alina Haynes

May 24, 2022 09:43

Gold prices rise as the dollar weakens to start the week. The currency experienced negative pressure on reduced growth prospects and likely march toward recession. Benchmark rates climbed as shares surged today. Today, the yield on the ten-year Treasury note rose by 3 basis points.

 

On Monday, there was little going on in the world of business. Focus continues on Fed Chair Powell’s speech tomorrow and major economic statistics including PCI and first-quarter GDP published this week. Investors are anxious about impending recession and sluggish economic growth.

Analytical Methods

Gold prices came back from session highs but are still higher and possibly be headed to the 1860s. This week's economic statistics might point to a slowdown in economic growth, which would benefit gold.

 

To begin the week, gold prices held above the 200-day moving average of $1839. Support is indicated near the 200-day moving average near 1839. Resistance is apparent at the May 12th peak of 1858.

 

The Fast Stochastic has formed a crossover buy signal, indicating that the short-term momentum is bullish. Prices are no longer oversold as the fast stochastic prints a value of 54.58, considerably above the oversold trigger level of 20.

 

Medium-term momentum turns bullish as the MACD can provide a crossover buy signal. This occurs as the 12-day moving average minus the 26-day moving average passes below the 9-day moving average of the MACD line.

 

Price declines are predicted by the MACD (moving average convergence divergence) histogram, which shows a downward trend in price.

 

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