Gold Rebounds After Sharp Losses as Investors Eye US Inflation Data

Gold prices rebounded on Monday, recovering from a two-week low hit in the previous session as traders gauge fading hopes for a US rate cut ahead of a key inflation report due out later this week.

Gold and the Dollar Now

– Gold futures are now up 0.34% to $2342 an ounce.

– Spot gold is up about 0.3% to $2339 an ounce, after touching its lowest since May 9 at $2325.19 on Friday.

– The metal had hit a record high of $2449.89 earlier last week but has shed more than $100 since then.

– On the other hand, the dollar index is flat at 104.640 points.

Other Metals

– Silver rose 1.4% to $30.60 an ounce in spot trading, platinum gained 1.2% to $1032.25, and palladium rose 1.2% to $969.72.

Oil Rises as Focus Shifts to Key Upcoming Events

Oil prices rose in early trading on Monday as markets await the OPEC+ meeting on June 2, where producers are expected to discuss maintaining voluntary output cuts for the rest of the year.

Key Events to Watch This Week for Traders

US Inflation Data

The Federal Reserve’s preferred inflation gauge – the PCE price index – due out on Friday will be closely watched for clues on the direction of interest rates for the rest of the year.

This data comes as markets have become resigned to a longer-term rate-hiking policy after the Fed meeting minutes in recent weeks, along with cautious comments from policymakers who expressed doubts that inflation is actually on a credible downward path.

Investors will also have the opportunity to hear from several Fed speakers throughout the week, including Fed Governor Michelle Bowman, Cleveland Fed President Loretta Mester, Governor Lisa Cook, New York Fed President John Williams, and Atlanta Fed President Raphael Bostic. The economic calendar also includes revised first-quarter economic growth data on Thursday, and the Fed’s Beige Book on Wednesday.

Eurozone Inflation

The European Central Bank has promised to cut interest rates from a record high of 4% at its next meeting in June, but it remains to be seen how quickly it will then lower rates, especially if inflation data due out on Friday shows price pressures are still sticky.

Economists expect eurozone inflation to rise to 2.5% in May on an annual basis, from 2.4% in April, while core inflation is seen steady at 2.7%.

This alone is unlikely to deter the ECB from cutting rates in June, but some officials are already arguing against the need for further easing.

Japan Data

Tokyo inflation data due out on Friday will be closely watched as markets try to gauge when the Bank of Japan might raise rates next.

These figures come two weeks ahead of the Bank of Japan’s next monetary policy meeting, with some betting the central bank could raise rates for a second time after its historic move in March.

Policymakers are under increasing pressure to raise rates amid continued weakness in the yen, which is hurting consumption by inflating the cost of raw material imports.


Disclaimer: This article is not investment advice or an investment recommendation and should not be considered as such. The information above is not an invitation to trade and it does not guarantee or predict future performance. The investor is solely responsible for the risk of their decisions. The analysis and commentary presented do not include any consideration of your personal investment objectives, financial circumstances, or needs.

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