Gold Weekly Forecast: Bullion Depends on US T-bond yields

Gold Weekly Forecast (Bullion): There won’t be any significant macroeconomic data releases at the start of the week but several members of the FOMC, including Chairman Powell, will be delivering speeches on Monday and later in the week.

Powell is unlikely to change his tone only a few days after the policy meeting but market participants will keep a close eye on bond yields. The benchmark 10-year US T-bond yield seems to have met strong resistance at 1.75% and a break above that level could provide a boost to the USD and weigh on gold.

Gold Weekly Forecast: Yellow Metal Depends on US T-bond yields

  • Gold closed the week modestly higher above $1,740.
  • Key technical levels for gold remain intact in the near-term. 
  • USD weakness on dovish FOMC outlook was short-lived.

On Wednesday, the IHS Markit’s Manufacturing PMI figures are largely expected to show that the business activity in the manufacturing sectors of the euro area and the US continued to expand at a robust pace in March. February Durable Goods Orders report will be featured in the US economic docket as well but it would be a big surprise if there was a noticeable market reaction to these data. 

On Thursday, the US Bureau of Economic Analysis will publish its final reading of the fourth-quarter Gross Domestic Product (GDP) growth. More importantly, the Core Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred gauge of inflation, will be looked upon for fresh impetus. The market consensus points to an unchanged reading in the Core PCE Price Index at 1.5% every year in February. The USD could benefit from a higher-than-expected print and vice versa.

Is it good time to buy gold?

  • Gold started the week in a quiet manner as investors refrained from taking large positions ahead of the FOMC’s policy announcements. After fluctuating in a relatively tight range below $1,740 during the first couple days of the week, the gold pair capitalized on the broad USD weakness on Wednesday and extended its climb to a fresh two-week high of $1,755.59 during the Asian trading hours on Thursday.

However, the pair struggled to preserve its bullish momentum and closed the day in negative territory before going into a consolidation phase on Friday. Nevertheless, gold settled above $1,740 and managed to post gains for the second straight week.

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