Gold | How far can the uptrend continue? Given the strong uptrend of gold and breaking the resistance at 2350, we can expect the next price ceiling to be in the range of 2370 - 2375, and gold to move towards this range.
Key resistances:
2350
2370 - 2375
Key supports:
2325 - 2330
2300 - 2305
Fundamental:
Wall Street Awaits Earnings Reports, Oil Eyes Global Demand, CPI and Central Bank Meetings in Focus
The second quarter of 2024 got off to a rough start for Wall Street. Strong US economic data and surprise nonfarm payrolls results led market participants to reassess rate hike expectations, compounding geopolitical tensions in the Middle East that stoked some short-term concerns. Oil prices hit their highest level in five months and oil continued its record-setting rally despite the dollar not strengthening. Continued conditions could complicate the Fed's role in inflation and push it to the sidelines.
April will focus on the next earnings season in the US to see if corporate revenue recovery since late last year has more room to run. As usual, earnings season kicks off with reports from big US banks like JPMorgan, Wells Fargo and Citigroup on Friday the 12th.
This week will also see inflation data from the US and China including consumer (CPI) and producer (PPI) prices, central bank meetings from Europe, Canada and New Zealand, US corporate earnings reports, UK GDP and more in focus for investors.
Inflation and Fed Meeting Minutes Again Under Investor Microscope
The most important US event this week will be inflation data for March with consumer (CPI) and producer (PPI) price indexes. Inflation has stubbornly stayed hot in recent months, with housing especially sticky and surging insurance costs greatly impacting core inflation readings.
Uncertainty remains but prices paid in the ISM, NFIB prices and employment cost index all indicate pricing pressures should meaningfully abate through the year. However, the Fed is concerned about some metric influences like one-off annual insurance hikes, rent increases and more that could further cloud the outlook.
Core CPI is expected to rise 0.3% monthly and 3.7% yearly in March, down 0.1% from prior periods in both measures. Headline CPI is seen easing to 0.3% monthly and rising to 3.4% yearly, a 0.2% increase from prior. PPI is also expected to show easing pressures. Overall, hotter-than-expected inflation could push price-setters away from a June Fed rate cut and hot inflation amid tight labor markets would reinforce dollar strength.
