Gold Price Forecast: XAU/USD is chipping away at critical support, eyes on a strong breakout – by fx_ross Gold DollarIndex Currencies Fed Commodities
Futures pricing suggests traders see a nearly 90% chance of a 75 basis point rate hike in the United States next month and more than 150 bps of tightening by May. As a result, US stocks dropped on Friday. The Dow Jones Industrial Average collapsed by more than 600 points, sliding 2.11%, while the S&P 500 lost 2.8% and the Nasdaq Composite IXIC lopped off 3.8% in value as investors bet that the Fed's inflation fight will continue apace.
We saw more evidence of that in the weekend's Caixin Services Purchasing Managers' Index for September 2022 which came in lower at 49.3 from 55.0 in August, taking it back into contraction. We have also seen China official services PMI miss the mark at 50.6 and China Caixin / Markit Manufacturing PMI for September was disappointing at 48.1 . This all should fall into the hands of the greenback, especially with the number of geopolitical risks thrown into the mix.
For the week ahead, the US inflation data will be a key event. The US Consumer Price Index likely stayed strong in September, with the series registering another large 0.5% MoM gain, analysts at TD Securities argued. ''Shelter inflation likely remained strong, though we look for used vehicle prices to retreat sharply. Importantly, gas prices likely brought additional relief for the headline series again, declining by about 5% MoM. Our MoM forecasts imply 8.2%/6.
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