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Gold: Could Rate Cut Hopes Survive till Fed’s June Meet?

Published 04/01/2024, 11:19 AM

On analyzing the gold futures in the daily chart, I find the exacerbated movements amid growing bullish sentiments for an interest-rate cut by the Fed in its June 2024 meeting.

The Fed signaled that interest rates could begin to decline shortly but made it clear that they will keep an eye on changing economic conditions as the Federal Open Market Committee held rates steady during their previous meeting in March 2024.

FOMC raised interest rates to 5.25% - 5.50% at its July 2023 meeting but they still did not look convincing enough to curb inflation. Since then, rates have held steady confirming the sustainability of this rally in the gold futures could not last for a long as some Fed watchers are more concerned about the risks of bank failure, stock market instability, mortgage rates, and global economic uncertainty.

Since I wrote my last article, when the gold futures at $2168, after hitting a weekly high at $2232 on March 21 with a bearish formation, I could not imagine that only mere rate-cut hopes could push the gold futures to hit a life-time high.

But, today’s move ensures an advent of exhaustion, after the announcement of consumer prices. I conclude that a sustainable move below the immediate support at $2242 will confirm the continuation of the selling spree.

Gold Futures Daily Chart

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