{"id":66020,"date":"2023-07-11T15:27:23","date_gmt":"2023-07-11T12:27:23","guid":{"rendered":"https:\/\/ironfx-com-php8.wp-dev.int.theitops.net\/?p=66020"},"modified":"2026-02-05T09:13:51","modified_gmt":"2026-02-05T07:13:51","slug":"gold-outlook-god-bulls-take-the-lead","status":"publish","type":"post","link":"https:\/\/www.ironfxcn.com\/nl\/gold-outlook-god-bulls-take-the-lead\/","title":{"rendered":"Gold Outlook: God bulls take the lead"},"content":{"rendered":"

The upward movement of gold\u2019s price<\/a> seems to have begun since the end of the past week. The weakening of the USD in combination with the drop of US yields allowed gold\u2019s price to climb higher. We expect fundamentals including the Fed\u2019s intentions as well as financial data releases such as June\u2019s US CPI rates to influence the precious metal\u2019s price next week. In this report, we aim to shed light on the catalysts driving gold\u2019s price, assess its future outlook and conclude with a technical analysis.<\/p>\n\n\n\n

The US Employment report<\/strong><\/h2>\n\n\n\n

The rise of gold\u2019s price had become more evident on Friday as the market\u2019s expectations for a possible worse-than-expected US employment report for June tended to grow. We have to note that the wider-than-expected drop of the NFP figure tended to disappoint traders exercising downward pressure on the USD, which allowed gold\u2019s price to rise.<\/p>\n\n\n\n

Yet a cooler look at the data provided by the US employment report for June tends to show a mixed picture. Despite the drop the NFP figure is still at rather healthy levels and the fact that the unemployment rate ticked down to 3.6%, tended to highlight that the US employment market remains tight. Even worse the average earnings growth rate did not slow down as expected, on the contrary, it even accelerated, implying that the US employment market may continue to feed inflationary pressures in the US economy.<\/p>\n\n\n\n

We do not contradict the idea that the Fed\u2019s monetary policy tightening is going to crack (to put it mildly) the tightness of the US employment market, we\u2019re saying that it has not done so yet and that may allow the Fed to remain hawkish.<\/p>\n\n\n\n

Another two rate hikes?<\/strong><\/h2>\n\n\n\n

However on Monday the USD tended to retreat further as Fed officials proceeded with statements regarding the Fed\u2019s intentions. There were some mixed signals as Atlanta Fed President Bostic stated that a \u201cpretty straightforward\u201d case seems to be building up that the inflation is to return to the Fed\u2019s 2% with no further rate increases. On the other hand, San Francisco Fed President Daly stated that she believes that two more rate hikes are needed this year to bring inflation down.<\/p>\n\n\n\n

While the more hawkish comment came from Cleveland Fed President Mester as she stated that \u201cThe economy has shown more underlying strength than anticipated earlier this year, and inflation has remained stubbornly high, with progress on core inflation stalling,\u201d implying more rate hikes are required. Yet the market had allready priced in another two rate hikes to come and the possibility of the Fed ending its rate hiking cycle afterwards was enough for the market to sell the dollar and thus allow gold\u2019s price to rise, something that became even more evident on Tuesday.<\/p>\n\n\n\n

Next tests for Gold\u2019s price<\/strong><\/h2>\n\n\n\n

In the coming days, we expect gold to maintain its negative correlation with the USD and any further weakening of the USD may allow gold\u2019s price to rise. As the next key event for gold we highlight the release of the US CPI rates for June tomorrow Wednesday. Currently, the headline rate is expected to slow down on a year-on-year level, as well as on a core level, while it is expected to accelerate on a month-on-month level.<\/p>\n\n\n\n

Overall should the release show that inflationary pressures tend to ease further that may allow the USD to weaken as the market\u2019s expectations for an easing of the Fed\u2019s hawkish stance could intensify. Such a development very much alike with the release of the US employment report for June may allow gold\u2019s price to rise. On the flip side should inflationary pressures remain stubbornly high, we may see the USD gaining and gold\u2019s price dropping.<\/p>\n\n\n\n

Technical Analysis – Gold<\/strong><\/h2>\n\n\n\n

XAUUSD H4 Chart<\/em><\/strong><\/h3>\n\n\n\n
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