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On May 27, it was reported that US President Donald Trump and Israeli Prime Minister Benjamin Netanyahu spoke by phone on May 26 local time. An informed source stated that the two sides discussed the situation amidst regional tensions and as US-Iran diplomatic negotiations entered a crucial phase.On May 27th, according to Nikkei, Federal Reserve Chairman Neel Kashkari stated that the Fed may take a "series" of interest rate hikes to address inflation caused by the Middle East situation. During the FOMC meeting in late April, the Fed kept interest rates unchanged. Kashkari and two other officials objected to the Feds decision to include language in its statement hinting at future monetary easing. In a written interview, Kashkari stated, "I think the next rate adjustment could be a rate cut, or it could be a rate hike," expressing his differing opinion. Kashkari said the outcome depends on the trend of inflation, which in turn depends on whether the Strait of Hormuz reopens soon or remains effectively closed due to further damage to the regions infrastructure, the latter exacerbating the global energy shortage. Kashkari expressed concern that long-term inflation expectations for businesses and households "could get out of control." He stated that the FOMC "will likely need to take strong measures," and that rate hikes, or even a series of rate hikes, may be necessary.Federal Reserves Kashkari: A protracted war with Iran could trigger a "series" of interest rate hikes in the United States.May 27th - As of 2:30 PM closing, the Shanghai Gold futures contract fell 1.15% to 988 yuan/gram, the Shanghai Silver futures contract fell 1.38% to 18,601 yuan/kilogram, and the SC Crude Oil futures contract rose 0.81% to 610 yuan/barrel.Micron Technology (MU.O) surged over 20%, marking its biggest single-day gain since 2011.

Gold Price Prediction: XAU/USD falls to $1960 as USD recovers in advance of Core PCE Price Index

Daniel Rogers

Mar 29, 2023 14:23

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After failing to hold above $1,970.00 during the Asian session, the gold price (XAU/USD) has declined. As concerns of a U.S. banking crisis have diminished significantly, the allure of the precious metal has decreased. As the US Dollar Index (DXY) has shown a recovery move, it is expected that the Gold price will continue to correct.

 

The USD Index has recovered after establishing a cushion around 102.40. The USD Index has extended its recovery to near 102.60 as investors transfer their attention to Friday's core Personal Consumption Expenditures (PCE) Price Index data.

 

The Federal Reserve's (Fed) preferred inflation gauge is anticipated to increase by 0.4%, which is less than the previous increase of 0.6%. The annual rate is anticipated to remain unchanged at 4.7%. A deceleration in the rate of consumer spending on essential products will further diminish the likelihood of another rate rise by the Federal Reserve. The likelihood of a decline in consumer expenditure has increased as the labor cost index has remained lower than anticipated. In addition, after the failure of three mid-sized institutions, US banks have tightened credit conditions for individuals and businesses.

 

In the meantime, S&P500 futures posted stronger gains during the Asian session following a rangebound auction on Tuesday. US stocks have been supported by expectations that the Federal Reserve (Fed) will maintain constant interest rates in the future.

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