Article by: ETO Markets
The price of gold fails to build on the day's gains and moves in a narrow range. The Federal Reserve may postpone interest rate reductions, according to rumours fuelled by a strong US inflation report, which keeps the returns on US Treasury bonds high. This helps the US Dollar draw in some buyers, which, together with the general risk-on sentiment, limits the precious metal's upside potential under overbought daily chart conditions.
Nonetheless, the markets continue to factor in a higher likelihood that the Fed would start reducing interest rates during the June policy meeting. Aside from this, geopolitical threats resulting from the ongoing conflict in the Middle East and Russia-Ukraine may continue to support the price of gold. Ahead of the critical FOMC meeting the following week, which is expected to provide clues about the Fed's route toward rate cuts and identify the next leg of a directional move for the non-yielding yellow metal, traders may also opt to stay out of the market.
A surprising drop in US Crude stocks is blamed for the spike in oil prices, indicating a strengthening of demand. Oil prices have also increased due to worries about possible supply interruptions brought on by Ukrainian raids on Russian refineries.
The Australian Dollar loses its intraday gains on Thursday and enters negative territory. The Federal Reserve is expected to start cutting interest rates in June, which is why the AUD/USD pair rose, even if the Reserve Bank of Australia is still indicating that it might need to boost rates even more. Australia's inflation is largely "homegrown" and "demand-driven," resulting from rising wage inflation and a robust labour market. The Reserve Bank of Australia believes that inflation won't return to target until 2026.
After a 0.8% decrease in January, US retail sales are predicted to increase by 0.8% in February. In the meantime, February saw a 1.1% YoY growth in the US PPI as opposed to a 0.9% increase the prior month. It seems unlikely that the US consumer demand and any indications of sticky inflation will be good news for the price of gold.
In order to move the price of gold toward Tuesday's high of $…, beyond which the all-time highs of $… will be retested, buyers are waiting for an entry over $... The psychological level of $… and the $… barrier represent the next important upside targets.
On the other hand, the initial demand region is observed at the $… low on Wednesday. If that level is not held, the previously noted strong support will be put to the test once more at $...
A surprising drop in US Crude stocks is blamed for the spike in oil prices, indicating a strengthening of demand. Oil prices have also increased due to worries about possible supply interruptions brought on by Ukrainian raids on Russian refineries.
Oil security was highlighted by the International Energy Agency (IEA), and the Organization of the Petroleum Exporting Countries (OPEC) expressed gratitude for the statements. The IEA gave advice to developed countries, noting recent disagreements with OPEC over matters including long-term demand and the need to invest in new supplies.
The first-line resistance of $… at the top and the first-line support of $… at the bottom will be of particular interest to investors. Prior to making any adjustments, we will simultaneously consider both higher and lower breakthroughs.
