A Quiet Week Prior to Another Storm?
The economic schedule for this week is somewhat lighter than last week’s mighty few days of market thrills, significant central bank meetings, and high-risk events.
Naturally, addresses by Fed officials like Jerome Powell and US President Joe Biden’s State of the Union Address will receive a lot of attention. Overall, increased Fed raise expectations, a stronger dollar, and higher Treasury rates should largely determine the course of gold.
Beyond this week, the US inflation data is everything. The annual inflation rate in the US dropped to 6.5% in December 2022, slowing for a sixth consecutive month. The US labor market’s solid performance, however, may increase worries that inflation will remain persistently high despite the current slowdown. In the end, as the struggle for supremacy continues, more indications of easing inflationary pressures in January may provide gold bulls a sort of lifeline.
Other Themes to Be Aware Of
If tensions rise, this might encourage risk aversion and increase demand for safe-haven assets. The demand for gold could increase, but this might be restrained by a rising dollar.
Will Gold Stay Below $1900?
Gold prices on the daily charts are still under pressure despite edging up on Monday. Bears are unquestionably in a position of power after slicing through the $1900 psychological mark like a hot knife through butter. If prices remain weak below $1880, they can go in the direction of $1825 and $1800, respectively. Gold might target $1950 and $2000 if prices can rise back over $1900.