GOLD Analysis
Afternoon: GOLD Decline Amid Downgraded Fed Rate Cut Expectations
Highlights:
- Gold fell to $2,330, hitting two-week lows as investors lowered Fed rate cut expectations following strong US economic activity.
- S&P Global's May flash PMI readings indicate increasing US economic activity, while jobless claims were lower than predicted.
- Upcoming data includes German Final GDP q/q, GBP Retail Sales m/m, US Core Durable Goods Orders m/m, Durable Goods Orders m/m, and Revised UoM Consumer Sentiment.
Introduction:
Gold prices have fallen to approximately $2,330, reaching two-week lows and heading for their first weekly decrease in three months. This decline comes as investors lower their expectations of Federal Reserve rate cuts following recent U.S. economic releases.
Economic Indicators and Market Reactions
- S&P Global's May Flash PMI Readings: The latest readings for manufacturing, services, and composite PMIs show an increase in U.S. economic activity.
- Jobless Claims: The number of Americans filing for unemployment benefits was lower than expected, indicating a strong labor market.
- Fed's May Meeting Minutes: Concerns about persistent inflation were highlighted, with some members suggesting potential interest rate increases if price growth continues.
Upcoming Economic Data Releases
Key economic data scheduled for release includes:
- German Final GDP q/q (Euro Zone)
- Retail Sales m/m (GBP Zone)
- Core Durable Goods Orders m/m (US Zone)
- Durable Goods Orders m/m (US Zone)
- Revised UoM Consumer Sentiment (US Zone)
Technical Analysis:
Gold prices are expected to find support at $2305 and face resistance at $2350. For Gold MCX, support is anticipated at 71100 and resistance at 72000.
Conclusion
The gold market is experiencing a downturn as investors adjust their expectations regarding Federal Reserve policy. The combination of strong economic activity, low jobless claims, and persistent inflation concerns is influencing market sentiment. Investors should keep an eye on upcoming economic data releases and adjust their strategies accordingly.
Support and Resistance Levels:
