- Gold price has displayed a decline after a short-lived pullback to near $1,934.00 as Fed delivered hawkish guidance.
- Some sort of consolidation is anticipated from the USD Index as investors are awaiting the release of the Retail Sales data.
- Gold price has displayed a breakdown of the crucial support plotted from March 22 low at $1,934.34.
Gold price (XAU/USD) has witnessed selling pressure after a less-confident recovery to near $1,934.74 in the London session. The precious metal has retreated as a neutral interest rate decision by the Federal Reserve (Fed) is merely a skip. Fed chair Jerome Powell has confirmed that more interest rate hikes will be announced as a victory against stubborn inflation is still far.
S&P500 futures have added more losses in Europe as fears of a recession in the United States are still healthy. The market sentiment is quite cautious as the Fed reiterated that core inflation is still persistent and labor market conditions are extremely tight. Also, Fed Powell confirmed that no rate cuts are appropriate by the year-end.
The US Dollar Index (DXY) has dropped to near 103.15 after facing stiff barricades around 103.40. Some sort of consolidation is anticipated from the USD Index as investors are awaiting the release of the monthly Retail Sales data.
As per the preliminary report, the economic data is seen contracting by 0.1% vs. an expansion of 0.4% registered in April. As food and gasoline prices have fallen significantly, a scrutiny of the Retail Sales report will be required to gauge whether the retail demand has contracted due to lower prices of necessities or the economy is losing resilience.
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