The recent falls in gold have occurred after constant Fed messaging that two rate hikes seem the likely option this year.
Higher rates and a stronger USD is a natural headwinds for gold. However, the Fed is also data dependent and some crucial data is set to be released on Friday; the Fed’s preferred measure of inflation the PCE print. The PCE print refers to the measurement of personal consumption expenditures, which tracks the expenditure on goods and services by US citizens. Since around 2012, the PCE index has become the primary inflation index used by the Federal Reserve to guide its policy decisions.
If this reading comes in very high on Friday then gold is likely to fall out of the meeting.
Note the seasonals for gold also favour selling. Over the last 25 years between June 30 and July 08, gold has fallen 64% of the time for an average fall of -0.41%. The maximum fall has been 4.00% in 2010, but falls of greater than 2% have also occurred in 2022, 2017,2010 2005, 2000, and 1999. So, will gold move lower if Friday’s US core PCE print comes in above 4.7% for the core and above 4.4% for the headline?
Major Trade Risks: The main risk here would be if the US Core PCE print comes in below 3.9% for the headline and below 4.5% for the core as this would likely lift gold on lower rate expectations.
Disclaimer: Past results and past seasonal patterns are no indication of future performance, in particular, future market trends. seasonax GmbH neither recommends nor approves of any particular ...
Disclaimer: Past results and past seasonal patterns are no indication of future performance, in particular, future market trends. seasonax GmbH neither recommends nor approves of any particular financial instrument, group of securities, segment of industry, analysis interval or any particular idea, approach, strategy or attitude nor provides consulting nor brokerage nor asset management services. seasonax GmbH hereby excludes any explicit or implied trading recommendation, in particular, any promise, implication or guarantee that profits are earned and losses excluded, provided, however, that in case of doubt, these terms shall be interpreted in abroad sense. Any information provided by seasonax GmbH or on this website or any other kind of data media shall not be construed as any kind of guarantee, warranty or representation, in particular as set forth in a prospectus. Any user is solely responsible for the results or the trading strategy that is created, developed or applied. Indicators, trading strategies and functions provided by seasonax GmbH or on this website or any other kind of data media may contain logical or other errors leading to unexpected results, faulty trading signals and/or substantial losses. seasonax GmbH neither warrants nor guarantees the accuracy, completeness, quality, adequacy or content of the information provided by it or on this website or any other kind of data media. Any user is obligated to comply with any applicable capital market rules of the applicable jurisdiction. All published content and images on this website or any other kind of data media are protected by copyright. Any duplication, processing, distribution or any form of utilisation beyond the scope of copyright law shall require the prior written consent of the author or authors in question. Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results. Testimonials appearing on this website may not be representative of other clients or customers and is not a guarantee of future performance or success.
