Gold price forecast have slightly dropped today, though they remain close to their highest level in a month. This drop is linked to predictions of lower Treasury yields and a weaker U.S. Dollar, both influenced by slower-than-expected inflation in the U.S.
Gold Prices Forecast: Key Highlights from Wednesday’s Market Recap
On Wednesday, gold prices surged close to a one-month high as the U.S. Dollar weakened and Treasury yields fell. The U.S. Consumer Price Index (CPI) showed a smaller increase than expected in April, with a rise of only 0.3%, compared to 0.4% in previous months. This led traders to believe that the Federal Reserve might soon cut interest rates to control inflation. The U.S. Dollar dropped by 0.6% against other major currencies, which made gold more attractive to foreign buyers. In addition, 10-year Treasury yields fell to a one-month low.
Gold Prices Forecast: What to Expect Next in the Market Outlook
According to the CME FedWatch Tool, traders believe there is a 74% chance that the Federal Reserve will cut interest rates by September. When interest rates are lower, holding non-interest-paying assets like gold becomes more appealing. Still, analysts are cautious about the timing of these cuts. Phillip Streible, chief market strategist at Blue Line Futures, said that while inflation numbers suggest the Federal Reserve may consider rate cuts soon, it is not guaranteed when this will happen.
Gold Prices Forecast: Analyst Opinions and Mixed Views on Market Trends
While the market seems to expect rate cuts soon, some analysts are not so sure. Jerome Schneider from PIMCO noted that even though inflation is cooling, the Federal Reserve’s future plans are still unclear. He pointed out that inflation needs to stay low for the Fed to reach its target of 2%. Meanwhile, Jacob Mitchell from Antipodes Partners mentioned weak retail sales, which stayed flat instead of growing by the expected 0.4%. This slowdown in consumer spending could reduce the need for the Fed to raise rates further.
Gold Prices Forecast: Cautious Optimism
Looking ahead, gold prices forecast may face resistance around $2,400. While inflation is slowing and rate cuts could be coming, gold could struggle if the U.S. Dollar strengthens or Treasury yields increase. In the short term, gold’s outlook is cautiously optimistic, depending on further economic data and decisions by the Federal Reserve.
Technical Analysis: Understanding Current Trends
The XAU/USD pair is trending down today after giving up earlier gains. Selling pressure came in as gold approached the minor peak of $2417.92 and the all-time high of $2431.59, leading some traders to take profits.
In the short-term, gold’s price is moving between $2431.59 and $2277.34. Key support levels include the pivot point at $2354.47 and a minor low at $2332.11. The 50-day moving average at $2283.95 and the swing low at $2277.34 are also key levels to watch for potential price movement.
For more insights into daily gold market movements, please refer to our internal link at Daily Gold Signal and check out more detailed updates at Daily Gold Update.
