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Gold Collapses As Fed Easing Expectations Fade

Gold Collapses As Fed Easing Expectations Fade

  • By Admin
Gold Under PressureThe rally in the US Dollar on the back of yesterday’s inflation report has caused widespread impact across markets. Gold prices have come under heavy selling pressure with futures seen breaking down to fresh lows for the year. Given the pushback we’ve heard from the Fed, this latest hot inflation reading is causing a significant repricing in rates projections over the coming months. With USD rallying and looking likely to remain supported near-term, the outlook for gold is considerably bearish for now.Further US Data DueFocus now shifts to the next slew of US data with retail sales and unemployment claims due tomorrow and PPI and UoM consumer sentiment due Friday. If retail sales are seen above forecasts this will no doubt drive the current USD rally higher still, pushing gold prices down further. Alongside the data we’ll also hear from Fed’s Waller. If Waller takes a more hawkish tone on the back of yesterday’s data, this should see gold breaking local support ahead of Friday’s data.Bearish Gold RisksWhile the Fed is insistent that rate cuts are likely this year, it remains unclear on timing. The bottom line for traders is that while data remains buoyant, particularly inflation data, the Fed is in no rush to cut rates. While this narrative remains, gold prices look vulnerable to further downside.Technical ViewsGoldThe turn lower from the 2069.41 level has seen the market breaking below the rising trend line from November lows. Price is now close to testing the 1973.51 level and with momentum studies bearish, risks of a downside break are seen. Below there, 1871.04 will be the next downside target for bears.
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