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With the start of this week's trading, Gold prices rose near $2,360 per ounce. They went on to trade at their highest level in three weeks, supported by expectations of an interest rate cut from the US federal Reserve, after weak employment numbers in the United States.
Last week, economic data showed a larger-than-expected rise in unemployment claims, indicating a slowdown in the labor market. Recently, the price of gold had recorded weekly gains of approximately 3%, raising its rise in 2024 to approximately 15%. In the same performance, silver prices, the sister commodity, trimmed most of its gains to close the trading week, despite remaining stable above $28 per ounce. The white metal will enjoy a weekly boost of 6.3% and reach nearly 19% year to date.
Meanwhile, this has led investors to expect that the US Federal Reserve will begin easing monetary policy in September. Traders are now bracing for the April CPI and Producer Price Index releases scheduled for this week to gain more clarity on the Fed's monetary direction, considering concerns expressed by several Fed officials about easing.
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The question now: Will the US Federal Reserve lower interest rates?
Despite some panic among a group of monetary policy makers, the futures market is confident that the US central bank will pull the trigger on cutting interest rates twice this year, starting in September.
At the same time, escalating tensions in the Middle East continued to enhance the appeal of a safe haven. On Sunday, Israel deployed its tanks east of Jabalia, north of the Gaza Strip, after a night of intense air and ground bombardment.
On another level, according to the platforms of stock trading companies , US stock futures were little changed on Monday as investors prepared for key US inflation data this week to gain insights into the path of the Federal Reserve's monetary policy. On Friday, the Dow Jones rose 0.32%, rising for the eighth straight session and recording its best week of the year. Recently, the S&P 500 rose 0.17%, while the Nasdaq Composite fell 0.03%. Consequently, these moves came as investors responded to a raft of US central bank comments, with several Federal Reserve officials calling for a cautious stance on lowering interest rates.
US inflation has been rising in recent months and Wednesday's April CPI reading will give markets a real test of what the Fed's next move could be. However, US Federal Reserve Chairman Jerome Powell said last month that the US central bank's next step would likely not be to raise interest rates. Wall Street markets also found support from a strong earnings season, with about 80% of companies reporting so far beating market expectations Price Forecast and Analysis Today:
As mentioned before, the increasing global geopolitical tensions and further central bank gold purchases will support bulls to push the gold price towards stronger upward levels, with the nearest resistance levels currently at $2375 and $2400 per ounce respectively. Regardless of the results of US inflation figures this week, buying gold from every dip level will remain the best trading strategy.
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