Gold price is trading higher on Tuesday.
Despite the US Dollar’s (USD) consolidation on Tuesday, the gold price (XAUUSD) rebounded. The upside for yellow metal may be limited. As traders remain on the sidelines ahead of critical US inflation data this week. In recent sessions, the XAUUSD has been under some selling pressure due to the US rate mantra of higher for longer. However, the safe-haven flows resulting from growing Middle East tensions may raise the current gold price.
US PPI report for April and Fed Chair Jerome Powell’s speech will be the main topics of discussion.
Investors will keep a tight eye on major US economic statistics this week. The US Producer Price Index (PPI) for April is due on Tuesday. Coinciding with Fed Chairman Jerome Powell’s address. The focus will move to the US Consumer Price Index (CPI). Which is coming on Wednesday. These publications may shed light on the date of the Federal Reserve’s initial rate change.
Any hints of sticky inflation could further reduce expectations for US interest rate reduction this year, putting pressure on yellow metal.
The higher-than-expected inflation statistics may weaken the chance of a Fed rate drop. Dragging on the precious metal. Higher interest rates may diminish overall investment demand for gold since. They raise the opportunity cost of owning gold.
Daily Market Movers: Gold price remains positive, with focus on critical US inflation data from Fed vice chair.
Philip Jefferson advocated for keeping interest rates at current levels until inflation shows indications of slowing saying. That he will continue to seek for additional evidence that inflation will return to the 2% target.
According to a Reuters poll, the Fed is expected to decrease the Fed funds rate by 25 basis points (bps) in September, and by 50 basis points in 2024.it’s
Israeli soldiers drove deep into the ruins of Gaza’s northern frontier on Monday to reclaim an area from Hamas militants, while tanks and troops pushed a highway into Rafah, forcing Palestinian inhabitants to evacuate, according to Reuters.
The US Producer Price Index (PPI) in April is projected to show an increase of 2.2% YoY, while the Core PPI statistic is expected to rise by 2.4% YoY for the same time period.
The US Consumer Price Index (CPI) inflation rate is expected to fall to 3.4% year on year in April, down from 3.5% in March. Core CPI inflation is expected to fall to 3.6% YoY in April, from 3.8% in March.
