Gold Rangebound On Rates And Inflation Tug Of War

Gold price analysis and news

  • Choppy Gold Trade Set to Persist
  • Gold Techs to Watch

Choppy Gold Trade Set to Persist

Gold is on course for a weekly loss for the first time in 4 weeks as rising global yields and a rising US Dollar continue to weigh on the precious metal. However, the price action remains somewhat choppy, which looks set to persist between 1800 and 1880.

As I said before, I find it hard to be bullish on gold given the significant rise in real yields (see chart below). Although, what I would say is that if yields start to pull back with a return to 3% for the US 10yr (currently at 3.25%), that would keep gold afloat. Ultimately, price action going forward is likely to remain limited in the short term.

Gold vs US 10-Year Real Yields

Source: Refinitiv

The Fed speaks in brief

Looking ahead to next week, the Fed speech will be the biggest risk for gold amid a slew of Fed officials, including Fed Chairman Powell, giving testimony on June 22.n/a. As we saw in his press conference, the Fed Chairman noted that a 75 basis point move would not be common. Although even the biggest doves on the committee, like the Fed’s Kashkari, are talking about the possibility of a 75 basis point rate hike in July, that will remain on the agenda during Chairman Powell’s testimony. That being said, in light of recent data prompting Fed officials to deviate from their forward guidance, economic data will be front and center in assessing the outlook for monetary policy.

Gold Techs to Watch

Support: 1833 (61.8% Fib), 1800 (psychological), 1786 (May 16e Down)

Resistance: 1843 (200MA), 1874 (50DMA), 1880 (monthly highs)

Gold price forecast: gold is limited by rates and inflation

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