Gold Retreats Amid Shifting Rate Cut Expectations
The when will pi coin launchprecious metal's recent pullback reflects changing market perceptions about the Federal Reserve's policy trajectory. Several Fed officials have recently emphasized the need for maintaining higher interest rates until inflation shows sustained movement toward the 2% target.
San Francisco Fed President Mary Daly's comments about prolonged restrictive policy particularly resonated with markets. Meanwhile, Atlanta Fed's Raphael Bostic maintained his projection for potential rate cuts later this year, though with reduced conviction given recent economic data.
Key Factors Influencing Gold's Near-Term Direction
Several competing forces are currently shaping gold's price action:
- Dollar strength from delayed Fed easing expectations
- Persistent Middle East geopolitical tensions
- Mixed signals from recent economic indicators
- Rebounding inflation expectations in consumer surveys
The unexpected drop in Michigan Consumer Sentiment to 67.4, coupled with rising inflation expectations in the same survey, creates a complex backdrop for precious metals traders.
Technical Perspective: Bullish Structure Remains Intact
Despite Monday's pullback, the technical setup maintains several constructive elements:
- Price holding above the 100-day EMA on 4-hour charts
- RSI maintaining bullish territory near 63.5
- Established support zones between $2,280-$2,325
The $2,378 level represents immediate resistance, with a potential breakout targeting the psychological $2,400 mark. Beyond that, the record highs near $2,432 come into focus for bulls.
Upcoming Market Catalysts to Watch
This week's economic calendar presents several high-impact events that could influence gold's trajectory:
- Speeches from Fed officials Jefferson and Mester
- US CPI and PPI inflation data releases
- Retail sales figures for April
Stronger-than-expected economic data could further dampen rate cut expectations, potentially extending gold's correction. Conversely, signs of economic softening might revive the metal's safe-haven appeal.
Geopolitical Factors Continue to Provide Support
Ongoing military operations in Gaza and the broader Middle East tensions continue to underpin gold's status as a hedge against geopolitical instability. The market appears to be balancing these supportive factors against the headwinds from monetary policy expectations.
