Gold Price Forecast: XAU/USD drops back closer to $1,930 level amid stronger US Dollar – by hareshmenghani Gold Commodities Fed Inflation XAUUSD
, solid wage growth and an unexpected downtick in the jobless rate pointed to the continued tightness in the labour market. This, in turn, raised the odds of a soft landing for the US economy and should allow the US central bank to stick to its hawkish stance.
Adding to this, Fed Governor Michele Bowman said on Monday that additional interest rate hikes will likely be needed to lower inflation to the central bank's 2% target. In remarks prepared for delivery to a "Fed Listens" event in Atlanta, Bowman added that inflation remains too elevated, and job growth and other indications of activity show the economy has continued expanding at a "moderate pace.
. He added that inflation was coming down as hoped and that while he expected unemployment to rise slightly as the economy cooled. This might hold back the USD bulls from placing aggressive bets and help limit losses for the US Dollar-denominated Gold price. Traders might also prefer to wait for a fresh catalyst from the latest consumer inflation figures from China and the US, due for release on Wednesday and Thursday, respectively.
Given that consensus estimates point to a further moderation in inflationary pressures, surprisingly stronger data should lift bets for one more Fed rate hike by the end of this year. This, in turn, could weigh heavily on the Gold price, which is seen as a hedge against inflation. The mixed fundamental backdrop warrants some caution before positioning for a further depreciating move for the
. The emergence of fresh selling, however, suggests that the downfall witnessed over the past three weeks or so is still far from being over and suggests that the path of least resistance for the XAU/USD is to the downside.
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