Gold price: Here’s what to expect ahead of Fed meeting, US CPI data

Gold price is set for its second consecutive week of gains even as it remains range-bound. Amid uncertainty over the next move by the Federal Reserve, investors are eyeing the US CPI data and Fed interest rate decision set for release next week.

Fundamentals

Uncertainty over the Fed’s decision in its June meeting is largely behind the range-bound trading recorded throughout the week. On the one hand, strong US job numbers late last week raised bets for a rate hike in July. Even so, weak data from the country’s services sector have clouded that outlook.

In the ensuing sessions, investors will be eyeing the US inflation data and Fed meeting scheduled for the coming week. While the Fed will likely pause on its rate increases in its meeting on 13^th and 14^th June, the focus will be on whether its tone points to further hikes in ensuing meetings. If that happens, the dollar will likely record further gains while weighing on gold and other precious metals.

Gold price prediction

Gold price is set for its second straight week of gains after recording losses for three consecutive weeks. Even so, it remains range-bound as has been the case for three weeks now. As at the time of writing, it was at 1,963.75.

As seen on its daily chart, the precious metal is trading below the 25 and 50-day EMAs, which are converging at 1,970.19. Indeed, it has been facing resistance at this level since the beginning of the week.

Based on both the fundamentals and technicals, gold price will likely remain in a consolidation mode in the short term as investors await further cues from the US data scheduled for the coming week. In particular, the range between 1,934.67 and 1,985.97 will be worth watching.

In reaction to the highly anticipated CPI numbers and Fed interest rate decision, signs that the US central bank will maintain high interest rates will have the bears eyeing the support level at 1,914.94. however, it the Fed takes a more eased approach in its upcoming meeting, gold price will likely rally past the psychologically crucial zone of 2,000.