Gold Crushed By Dollar Rally
Gold Continues Lower
Gold prices continue to drift lower through the back end of the week as the USD rally becomes more entrenched. We’ve seen a major shift in USD positioning over the last week on the back of the hawkish shift at the June FOMC meeting which is having ripple effects across markets this week. For gold, the jump in market pricing for a Fed rate hike by year end is a firmly bearish factor with the safe-haven asset typically less attractive during periods of higher US rates. With nine out of eighteen Fed members now seeing at least one hike this year and five seeing at least two, risks are skewed to the upside for USD which should keep gold prices anchored lower while DXY remains above the $100-level.
US Data & Fedspeak
Looking ahead today, traders will be watching the latest core PCE data (which is the Fed’s preferred gauge of inflation). The reading is expected to rise to 0.3% MoM from 0.2% prior. If seen, this should keep USD supported today with gold to stay lower accordingly. We’ll also hear from Fed’s Bowman and Williams which could help provide some relief for gold given that they are among the more dovish members of the Fed and likely to push back against aggressive tightening expectations.
Technical Views
Gold
The sell off in gold has seen the market breaking below the 4,092.60 level and the rising trend line off last year’s lows. Below here, 3,898.03 is the next support to note with 3,707.64 the deeper bear target in line with bearish momentum studies readings.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.