Will a higher printing of PCE impair Gold bull?
Macro theme:
The market is anticipating that the Fed will cut rates three times this year following the release of lower CPI numbers, which have fueled optimism that inflation is under control. Investors expect rate cuts in Sep, Nov, and Dec. This outlook is quite optimistic, given that the overall state of the US economy may not be dire enough to necessitate such aggressive measures immediately. The market is also awaiting the PCE data at the end of this week to confirm the disinflation trend further.
Technical theme:
- From a technical perspective, after topping at 2483, Gold had a significant correction to close below both the ascending channel and key support area 2420-2440. The price established a trading range of 2384-2440 and waited for an apparent breakout.
- If Gold closes above its resistance area around 2420-2440, it may retest its last swing high at 2483.
- On the contrary, if Gold extends its loss to below 2384, it may decline to 2330-2350 area.
The market is anticipating that the Fed will cut rates three times this year following the release of lower CPI numbers, which have fueled optimism that inflation is under control. Investors expect rate cuts in Sep, Nov, and Dec. This outlook is quite optimistic, given that the overall state of the US economy may not be dire enough to necessitate such aggressive measures immediately. The market is also awaiting the PCE data at the end of this week to confirm the disinflation trend further.
Technical theme:
- From a technical perspective, after topping at 2483, Gold had a significant correction to close below both the ascending channel and key support area 2420-2440. The price established a trading range of 2384-2440 and waited for an apparent breakout.
- If Gold closes above its resistance area around 2420-2440, it may retest its last swing high at 2483.
- On the contrary, if Gold extends its loss to below 2384, it may decline to 2330-2350 area.
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