The economists at TD Securities analyze the prospects of gold after US core PCE data lifted the yellow metal.
Downside risk narrows to 200-day SMA
A core PCE for May at 4.6% in the US is slightly lower than expected and with weaker May personal spending, the market pushed yields lower. With that, USD fell and Gold bounced convincingly above $1,900. This reduces the risk of a drop to the 200-day SMA for now.
Inflation is still too highso the restrictive discourse of the Fed will continue, but it bodes well for the long term as evidence is mounting that inflation has peaked and tends downward. This suggests that, while the yellow metal won’t crash, big gains are unlikely for a while. After all, the market is still pricing in an interest rate hike at the next FOMC.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
