{"id":77321,"date":"2024-02-20T14:39:18","date_gmt":"2024-02-20T12:39:18","guid":{"rendered":"https:\/\/ironfx-com-php8.wp-dev.int.theitops.net\/?p=77321"},"modified":"2024-02-20T14:39:18","modified_gmt":"2024-02-20T12:39:18","slug":"gold-outlook-exploring-us-cpi-rates","status":"publish","type":"post","link":"https:\/\/www.ironfx-cn.com\/ar\/gold-outlook-exploring-us-cpi-rates\/","title":{"rendered":"Gold Outlook: Exploring US CPI Rates"},"content":{"rendered":"

Gold\u2019s price experienced a shocking drop last week<\/a>, yet was able to recover the lost ground in the following days. We tend to maintain our worries for volatility to be maintained in the next week, yet at lower levels, given that the gravity and frequency of US financial releases is expected to largely ease, with some exceptions. Today we are to discuss the fundamental challenges laid ahead for the precious metal, while we will be concluding this report with a technical analysis of gold\u2019s daily chart.\u00a0\u00a0<\/p>\n\n\n\n

January\u2019s US CPI rates shock the gold market<\/strong><\/h2>\n\n\n\n

Gold\u2019s price experienced a shock last Tuesday as the release of the US CPI rates for January took the markets by surprise. The markets were expected to slow down materially, yet on a year-on-year level, the headline rate slowed down less than expected, while the core rate failed to slow down at all. Similarly, the PPI rates failed to slow down or even accelerated, which tended to support on a qualitative level on a producer level. The releases tended to highlight the persistence of inflationary pressures in the US economy and eased market expectations for the Fed to start cutting rates early and proceed with an extensive easing of its monetary policy. <\/p>\n\n\n\n

It\u2019s characteristic that the market has now shifted its expectations and is now expecting only four rate cuts starting from June onwards, a shift that has been solidified over the past few days. Market-wise the release of January\u2019s US CPI rates, provided extended substantial support for the USD, while the strengthening of the USD tended to weigh on gold\u2019s price, given the negative correlation of the two trading instruments. Despite the recovery of gold\u2019s price since the release, should the market expectations for an aggressive rate-cutting schedule on behalf of the Fed continue to retreat we may see the market sentiment weighing on gold\u2019s price and to that end we highlight any comments on behalf of Fed policymakers in the coming days.<\/p>\n\n\n\n

Fed officials and their influence<\/strong><\/h2>\n\n\n\n

Overall we expect the market\u2019s expectations for the Fed\u2019s monetary policy path to be influenced substantially from any statements that are to be made from Fed policymakers in the following days. Should Fed policymakers highlight a possible faster slowdown of inflationary pressures in the US economy, we may see it supporting gold price, while on the flip side, should Fed policymakers highlight a scenario that rates remain high for longer we may see them weighing on gold\u2019s price. <\/p>\n\n\n\n

Please note that San Francisco Fed President Daly highlighted a scenario where the bank will proceed with three possible rate cuts in the year, a scenario that was also supported by Atlanta Fed President Bostic and contradicts market expectations mentioned earlier.\u00a0<\/p>\n\n\n\n

The next tests for Gold\u2019s price<\/strong><\/h2>\n\n\n\n

We highlight the release of the Fed\u2019s January meeting minutes tomorrow as the next big test for gold\u2019s price given also the importance the Fed\u2019s stance has for gold market participants. In line with the analysis before, we expect that should the Fed\u2019s meeting minutes show a decisiveness to maintain a tight monetary policy for a longer period, we may see the release weighing on gold\u2019s price and vice versa. <\/p>\n\n\n\n

Also, we note the release of the preliminary S&P PMI figures for February as well as the weekly initial jobless claims figure, both due out on Thursday. Any release that may provide some support for the USD, may at the same time weigh on gold\u2019s price.<\/p>\n\n\n\n

Gold: Technical Analysis<\/strong><\/h2>\n\n\n\n

XAUUSD Daily Chart<\/em><\/strong><\/h3>\n\n\n\n
\"XAUUSD<\/figure>\n\n\n\n