Gold Sentiments | Monitoring Key Levels Amid Economic Data and Market Trends | Fx Market

 

Gold is currently trading on a softer note and appears to be ending a three-day correction period during which it gained approximately 1.3%, recovering from a nearly 3.5% decline following last Friday's US jobs report. The crucial levels to monitor today are $2308, $2320, and $2299. Yesterday, the dollar depreciated alongside US interest rates after a softer-than-expected Consumer Price Index (CPI) report. However, the initial declines in both rates and the dollar were mitigated after the Federal Open Market Committee (FOMC) meeting, which, as anticipated, kept rates steady. The median dot plot now suggests one rate cut this year, down from the previously expected three cuts.

Today, the dollar has regained more ground and is showing a slightly firmer bias against G10 currencies. Trading activity remains subdued with mostly narrow ranges prevailing. Leadership from North American markets is anticipated, and a range extension seems likely. Most emerging market currencies are stronger, with a few exceptions from central Europe and the Chinese yuan. In the Asia-Pacific region, most major markets have advanced, with notable exceptions being Japan and China. In Europe, the Stoxx 600 is retracting about half of yesterday’s nearly 1.1% gain. Meanwhile, the S&P 500 and NASDAQ surged to new records yesterday before consolidating post-FOMC meeting. Both indices are trading with a firm bias today, particularly the NASDAQ.

The Producer Price Index (PPI) pales in significance compared to the CPI and the FOMC meeting outcomes. The CPI came in slightly lower than expected, leading to a complete reversal of the employment-induced gains in US yields. Notably, the two-year yield experienced its largest drop this year, falling 16 basis points and briefly dipping below 4.70% for the first time in over two months before settling back above that level following the FOMC conclusion.