Gold prices enjoyed an excellent week up as much as 3.19% percent on Friday before a pullback in the US session saw the precious metal trading at $1981/oz at the time of writing.
US INFLATION AND FED COMMENTS
Gold prices benefitted early in the week as US CPI came in much better than expected which saw market expectations for rate cuts in 2024 improve. Markets are now pricing in a rate cut for May 2024 at 47.9% up from 29.6% a week ago. The selloff in US Yields also helped while the ongoing uncertainty form the Middle East continues. This saw Gold breach the $1950 handle and print a daily high of $1970.91. This was followed by uncertainty on Wednesday before another miss by US data on Thursday gave Gold a further push toward the $2000/oz mark.
THE WEEK AHEAD: FEDERAL RESERVE MINUTES, FEDSPEAK AND US DATA
Heading into what is a shortened holiday week in the US and Gold faces risks from US data which could re-invigorate the US Dollar and drag Gold lower. Risk sentiment could also factor in as tensions in the Middle East show no signs of letting up either.
On the data front we have the release of the Federal Reserve Minutes which is unlikely to spring up any surprise. There have been positive signs since the previous Fed meeting, in terms of inflation and softening labor data in the US meaning any bullish rhetoric in the Fed minutes may be overlooked. There is also housing, durable goods orders and jobless claims numbers all due which could also see brief changes in sentiment toward the Dollar.
Taking all of the above into account any significant downside misses for the US and further labor market cooling could definitely see a further selloff in the US Dollar.