Data and news continued that support the decline of gold and silver once morest the return of the US dollar to high levels once more. The last of these data was the inflation index, which was very negative, as it rose above experts’ expectations, as well as previous readings, which was followed by a harsh wave of decline for metals and the US market.
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And if we take a moment to look at today’s data, we will discover that the Fed has to show a tougher face so that inflation does not rebound more violently, threatening the US economy catastrophically. The data revealed that the personal spending index increased monthly from January by 1.8%, which is a very negative sign when compared to experts’ expectations for a rise of only 1.3%. It is noteworthy that this index recorded a decline in the previous reading by -0.1%. It is a negative signal for the Fed and indicates the continued strength of inflation. The other more important thing is the rise in core PCE price index on a monthly basis by 0.6% which is higher than expected and also higher than the previous reading of 0.4%. It is a very negative signal for the Fed and it must interact with it. On an annual basis, the data revealed an increase in the basic consumption expenditures price index on an annual basis by 5.4%, which is higher than the expected 5.0% and from the previous reading of 5.3% following revision.
It is noteworthy that all inflation data released today came with an adjustment to previous readings to record higher rates (negative revision) for the Fed.
Today’s data also included an increase in the Michigan inflation expectations index for February by 4.1%, compared to 3.9% in the previous reading.
Look on now
Despite the decline in gold that followed the release of the data, gold did not fall below the pivotal levels of $1801, as ounces of spot gold contracts, at the time of writing the analysis at 8:10 minutes Riyadh time, recorded $1810.85, down by 0.59%, while it fell to the lowest levels of $21. to record $20,865, down by 2.08%.
The dollar is seen as the main factor in the decline of gold and its trading at lower levels, with bears controlling the scene. Where the dollar is now trading above 105.1 levels at the 3-month high, once morest a basket of foreign currencies.
The US dollar is positively affected by any signs that strengthen the Federal Reserve’s chances of raising interest rates more strongly in the upcoming meetings.
According to some economists, hotter-than-expected inflation data may force the Federal Reserve to aggressively raise interest rates once more. Expectations of higher long-term interest rates continue to overshadow gold prices as we approach the end of the week with a fifth consecutive weekly loss.
Besides the ever-rising prices, the report also noted that consumers continue to dump their savings to make ends meet.
Important levels…between 2000 and 1700 dollars
An analyst interested in the equivalent, Jonathan Da Silva, said in an article published on the Kitco gold news website, that the degree of volatility has increased for gold in recent days. Jonathan warned once morest buying gold at the current stage, saying that it is heading for further decline, and that its iron resistance will be represented in the levels of $1785 an ounce for gold, as for silver, its resistance is $20.8.
Also, the Turkish analyst, Shinay Serfoglu, said that as soon as gold loses the levels of 1830 dollars and the market continues to shift to dollars and returns, this makes the price of 1780 dollars an ounce come to the scene. It is noteworthy that Chennai predicted, in an analysis published on Investig, that the dollar index would reach 105.3 two days ago.
And the economic analyst, Musa Muhammad Tayah, considered in an analysis he published on the Investing website that the support levels at $1,775 are the confluence of the 200-day average and 100 important levels.
Meanwhile, positive visions for gold appear only in the long term when the talk is associated with the rise of the economic recession, as Bloomberg Intelligence believes that the economic recession will push gold to $ 2000 levels, while analyst Jordan Roy Byrne believes that gold will remain in circulation. The highest levels of $1,700 in the second quarter of the year, with the arrival of the real recession in the US economy in the third quarter, which is the period when gold is expected to launch to re-test its historical peak by the end of the year.
It is noteworthy that analyst Alex Boltan wrote in his technical analysis yesterday the following: “From a technical point of view, the XAU/USD pair maintains a short-term bearish bias according to the indicators on the daily chart, while the price continues to record lower lows below the 20-SMA. day (SMA) but remains stable above the 100- and 200-day SMAs.
The immediate support area is at the 2023 lows around $1,817. Loss of this level might risk a sharp decline, targeting $1,800 and then the 100-day SMA at $1,789. On the flip side, immediate resistance can be found at the weekly highs around $1,850, followed by the 20-day simple moving average at $1,870 and $1,900.”
Technical analysis of gold spot contracts
The FED SWAPS data revealed full pricing of 3 consecutive rate hikes by the US Federal Reserve, in the March, May and June meetings. I returned expectations The Fed’s follow-up tool reached interest rates at 5.50% in June, with a majority of 52%.
This change comes following the release of high personal consumption expenditures price index data, which will motivate the US Federal Reserve to raise the interest peak that will be announced at the next March meeting, which it set in its previous meeting at 5.1% (referring to 5.25%), which is expected to rise following the index data. Consumer prices came in higher than expected as well as CPI data which saw a bullish bounce in US inflation.