Gold Price Analysis: The US Dollar kicked off the week on the wrong footing on Monday, which allowed Gold price to hit multi-months. China’s reopening optimism and hopes that the US Federal Reserve (Fed) could slow its tightening pace lifted the overall market mood and knocked down the safe-haven United States Dollar. Expectations of a dovish Federal Reserve pivot picked up steam after the United Nonfarm Payrolls data suggested a tight labor market amid a moderation in wage growth.
- Hawkish Federal Reserve officials sap risk ahead of Chair Jerome Powell’s speech.
- Gold price gathers pace to regain $1,900 as US Dollar licks its wounds.
- Impending Golden Cross reinforces bullish interests in Gold price.
- 10-year US Treasury bond yields challenge the critical 3.50% level.
Gold price, however, quickly retraced from higher levels to settle the day at around $1,870 after hawkish commentary from a couple of Federal Reserve policymakers squashed investors’ optimism about a peak rate below the 5.0% level. San Fransisco Fed President Mary Daly said she expects the Federal Reserve to raise rates to above 5% in order to get inflation down. Further, Atlanta Federal Reserve President Raphael Bostic noted that it is ”fair to say that the Fed is willing to overshoot,” reiterating that he sees rates rising to between 5 and 5.25%.
All eyes now remain on the speech by Federal Reserve President Jerome Powell due later on Tuesday at 14:00 GMT. Powell is due to speak on “Central bank independence and the mandate – evolving views” at the Riksbank’s International Symposium on Central Bank Independence, in Stockholm. Although any hints on the Federal Reserve’s policy outlook for this year will be closely scrutinized ahead of the all-important United States Consumer Price Index (CPI) slated for release on Thursday.
