Gold prices have seen a significant increase, reaching 2368 USD per troy ounce as market expectations adjust to the possibility of future interest rate cuts by the Federal Reserve. Recent data from ADP showing lower-than-expected growth in private-sector jobs in the US for May, coupled with downward revisions in April’s figures, have fueled speculation about impending rate cuts. The CME Group’s FedWatch tool suggests a 70% probability of easing by September, with market participants anticipating two rate cuts in 2024.
The recent decision by the Bank of Canada to cut rates for the first time in four years, along with the expected rate cut by the European Central Bank, has further influenced gold prices. These movements by central banks around the globe are adding to the uncertainty in the market and impacting the price of gold.
Analyzing the XAU/USD pair, we see that gold has broken out of a consolidation range above the 2315.00 USD level and is now potentially poised to reach 2395.00 USD. The MACD indicator supports a bullish outlook, with the signal line showing an upward trend towards new highs. On the H1 chart, gold has experienced growth towards 2356.20 USD, followed by a consolidation range below this level. The market has since broken upwards, continuing its trajectory towards 2378.23 USD.
Gold prices are currently in a bullish phase, driven by changing expectations around US monetary policy and global central bank decisions. Investors are advised to pay close attention to upcoming US employment data and central bank announcements, as these factors could have a significant impact on the short-term dynamics of gold prices. The market remains uncertain, and it is crucial to stay informed and make decisions accordingly.