2024-02-15 04:19:00
Gold is temporarily supported by the 100-day moving average after plummeting, focusing on Fed expectations and terror data
During the Asian market session on Thursday (February 15), gold prices remained within a narrow range near the two-month low, close to the 1990 mark and the current entry point of the 100-day moving average, as traders assessed the stance of Federal Reserve officials. Higher-than-expected inflation data in January dampened expectations for an early and sharp interest rate cut and left Fed officials with mixed views.
After the price of gold was blocked from rising higher on Tuesday (February 13) and turned to fall by more than 40 US dollars, it continued its decline yesterday and hit the lowest point since December 13, touching the 1984 line. Looking at the daily chart, the price of gold is temporarily affected by the 100-day moving average. Support, Japan’s Asian market is cautious on both bulls and bears, and fluctuates within a narrow range. U.S. gold futures were also flat at $2,004.60 an ounce.
If gold prices fall below this moving average support, the 1965 200-day moving average below will be a more important test.
(Figure 1: Technical analysis of spot gold daily chart, source: Yihuitong)
Chicago Fed President Austan Goolsbee said on Wednesday that even if prices rise slightly higher than expected in the coming months, the Fed will still be on track to push inflation back toward its 2% goal.
Prior to Goolsby’s remarks, the U.S. inflation rate released on Tuesday unexpectedly rose, with the Consumer Price Index (CPI) rising at an annual rate of 3.1%, higher than the expected 2.9% increase.
After the CPI data was released, gold prices fell by about 1.4%, the largest single-day decline since December 4.
Michael Barr, the Fed’s vice chairman for financial supervision, said the Fed remains confident, but higher-than-expected inflation in January suggests the U.S.’s path back to 2% inflation “may be bumpy.”
Traders now expect around 97 basis points of rate cuts this year, up from around 85 basis points expected earlier on Wednesday, with the first rate cut likely to come in June. The “dot plot” released by the Federal Reserve in December predicts three 25 basis point interest rate cuts in 2024.
The focus now is the US “horror data” to be released at 21:30 tonight – US retail sales data, as well as the producer price index (PPI) data released on Friday (February 16). At least three Fed officials are scheduled to speak this week.
(Figure 2: U.S. retail sales data will be released tonight, source: Huitong Finance)
At 12:14 Beijing time, international spot gold was trading at $1,991.54 per ounce.
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