What did Powell say and what did gold do?

  • Federal Reserve Chair Jerome Powell expressed concerns about the trajectory of disinflation in the US, indicating a shift in his confidence level regarding the economic outlook.

Federal Reserve Chair Jerome Powell expressed reservations about the trajectory of disinflation in the US during his recent remarks, stating, “My confidence in that is not as high as it was.” Despite this, he indicated that further rate hikes were unlikely based on the data from the first quarter of the year. 

Powell’s comments largely echoed those made during his last press conference following the Federal Reserve’s previous meeting. 

Market sentiment regarding the Fed’s rate decisions appears to be slightly adjusting though, particularly after the release of new data showing faster-than-expected increases in producer prices in April. Traders are now considering a 60% chance of a rate cut in September, down slightly from the 64% chance before Powell’s remarks and the Producer Price Index (PPI) report. 

Following the release of the PPI data, the XAU/USD pair climbed nearly 0.8% to $2,357, with potential for further gains in upcoming trading sessions. Technical analysis indicates that the next obstacle for gold prices lies near trendline resistance at $2,370, while immediate support rests close to $2,320, followed by the 50-day Moving Average. 

Market attention now turns to the release of consumer price data for April, scheduled for Wednesday. 

Import the BlackBull Markets Economic Calendar to iCloud, Google, or Outlook to get alerts direct to your inbox, enabling you to plan your positions in advance. 


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