- In the middle of trading this week, the gold price settled at $2178 per ounce, after losing more than 1% in the previous session.
- Gold is affected by the US inflation data which came out stronger than expected and cast a shadow on expectations about when the Federal Reserve will start cutting US interest rates.
According to the results of the economic calendar data, data on Tuesday showed that the headline inflation rate in the US accelerated to 3.2% in February, which is higher than expectations and the January figure of 3.1%. The core rate fell to 3.8% from 3.9% but is still higher than the expected 3.7%. Both measures rose 0.4% monthly. However, markets continued to bet on a more than 60% chance that the Fed will start cutting US interest rates in June, even though the US central bank is widely expected to hold rates steady in March and May. Now, investors are looking ahead to US retail sales figures and producer inflation data later in the week.
Will the gold price decline in the coming days?
According to gold trading platforms, the gold price has risen by $100.19 per ounce, or 4.86%, since the beginning of 2024, according to trading on the contract for difference (CFD) which tracks the benchmark market for this commodity. Ulltimitally, gold is expected to trade at $2067.94 per ounce by the end of this quarter, according to global macroeconomic models and analyst expectations. Looking ahead, we expect it to trade at $2134.44 in 12 months.
As for the US stock market, S&P 500 and Nasdaq indexes closed lower yesterday as tech stocks took a breather. In terms of performance, the S&P 500 lost 0.2% after its record close the previous day, while the Nasdaq, which is dominated by tech stocks, fell 0.5%. Conversely, the Dow Jones Industrial Average ended the day up 38 points. Overall, investors are waiting for more data later in the week, including the Producer Price Index and US retail sales figures, to gauge the timing of a possible rate cut by the Fed. Furthermore, the Expectations for a 25-basis point cut in the federal funds rate in June remained unchanged, despite the higher-than-expected inflation rate in February.
According to performance, the tech sector saw Nvidia's stock fall 1.1% after rising 7.2% in the previous session, and Tesla's stock fell 4.5% after a downgrade by Wells Fargo. Also, Intel's stock lost 4.4% after reports that the Pentagon plans to spend heavily on a chip grant, which could impact Intel's federal funding outlook. On the other hand, Amazon's stock rose 0.7%, helping to offset losses in the Dow Jones Industrial Average.
Gold Price Forecast and Analysis Today:
There is no change in our technical view of the performance of the gold price, as the general trend is still bullish, considering that its recent gains moved all the technical indicators towards strong levels of saturation with buying. Therefore, we prefer to think about selling deals for gold without risk, as the occurrence of selling operations to take profits is strongly possible at any time. This is especially if the performance of the US dollar price improves as a result of the results of recent economic data. If this happens, the nearest support stations will be $2140, $2115, and $2085, respectively. Technically, the psychological level of $2000 will remain a separator between the two trends. Today, the price of gold will be affected by the level of the price of the US dollar, the extent of investors’ appetite for risk or not, and any signals from global central bank policy officials.
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