Gold is bouncing back towards the $2400 psychological level after slightly weaker US macroeconomic data was released this week.

Weaker inflation readings have helped gold bulls to come close to their all-time high once again. The other key macroeconomic data was also in favor of the yellow metal.

• Initial jobless claims came in slightly higher than expected at 222K (220K - forecast).
• Building Permits came in lower than expected at 1.440M (1.480M - expected).

Despite this, several Fed officials indicated that more data may be needed to properly access the trend before any action is taken on interest rates.
 

Persistently high inflation may prevent the Fed from making the much-anticipated rate cuts sooner.

Currently, the market is implying:

• 8.7% probability of a cut in June 2024
• 33.5% probability of a hike in July 2024
• 87.5% probability of a September 2024 cut

Higher for longer interest rates could have a negative impact on zero-yielding bullion.
 

However, any significant increase in the probability of a cut in the foreseeable future could push gold higher.

Support for XAUUSD may also come in the form of continued physical gold buying by central banks, as well as any sudden geopolitical turbulence.

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