Gold Price Forecast: XAU/USD bulls wait patiently for a buy low opportunity Gold XAUUSD DollarIndex Fed SEO
US Dollar slides during a risk-on start to the US day on the back of US data bucking the trend.Theis breaking the structure to the upside which could be paving the way for a buy-low opportunity for patient bulls for the sessions ahead.
''To state the obvious, the recent US data have come around to support our more hawkish view on the Fed, which in turn supports our call for a stronger dollar,'' the analysts at Brown Brothers Harriman said in a note. ''Market sentiment is finally swinging back in the US Dollar’s favor and we remain hopeful that the data continue to encourage this shift.''
For instance, the US data on Friday showed US consumer spending increased by the most in nearly two years in January, while inflation accelerated, adding to market fears the Fed could continue raising interest rates. However, today's Commerce Department's Durable Goods report, which covers everything from air fryers to helicopters, showed a whopping 54.6% plunge in commercial aircraft/parts. This led to the US-made merchandise numbers falling by 4.5% in January, steeper than the 4.
Nevertheless, worries about further interest rate hikes from the US Federal Reserve have kept bullion near a two-month low and WIRP suggests 25 bp hikes in March, May, and June are priced in that takes Fed Funds to 5.25-5.50%, the analysts at BBh warned. ''Right now, odds are running around 30% of a fourth hike in July but this should rise if the data continue to run hot. Strangely enough, an easing cycle is still expected to begin in Q4, albeit at much lower odds,'' the analysts added. ''Eventually, it should be totally priced out into 2024 in the next stage of Fed repricing. There are plenty of Fed speakers this week and we expect them to tilt heavily hawkish.
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