© Reuters.
Investing.com – US Consumer Confidence is now out, which came in against expectations, taking away some of the strength it had gained from recently released data regarding a stronger rise to the next meeting.
(February) data revealed a recording of 102.9 points against expectations of recording levels of 108.5 points, while the previous reading in January was reduced to 106 points from 107.1 points. Which reversed the direction of gold and the dollar now, as gold was walking in the bearish range, while the dollar was stable, so that gold turned to the upside, while the dollar headed to the downside.
The latest data comes after the statements of the heads and officials of the US Reserve Bank regarding the continuation of the Fed’s hawkish policy in order for the bank to achieve its inflation targets.
This indicator determines the mood of consumers regarding economic conditions. A higher reading indicates higher consumer optimism. When consumers are optimistic, they tend to buy more goods and services, which stimulates the economy. This reading is extracted from a monthly survey in which respondents are asked to rate the economy in the future.
Read also
Statements by members of the federation
Federal Reserve Governor Philip Jefferson said Monday that he “has no doubt that inflation will quickly return to the Fed’s 2% target.”
While a member of the US Federal Reserve, Jefferson, confirmed yesterday, Monday, that the labor market is very strong now, with high demand. It is important to return to the inflation target of 2% to allow for sustainable economic gains.
He continued: The Fed has a strong desire to do what it takes to bring down inflation. “It will not be easy to get inflation back to 2%, and it may take some time,” he said.
“Inflation remains very high, and recent data — including several strong labor market indicators, as well as faster-than-expected retail sales and producer price inflation — all reinforce my view,” Boston Fed Chair Susan Collins said on Friday. We have more work to do to bring inflation down to the 2% target.”
Markets expect the Fed’s target interest rate to peak at 5.403% in September.
The amount of the interest increase
“The question remains, how much will the Fed increase? … as this depends a lot on how the US data turns out and, in particular, if the downward trend is more firmly established,” said Christopher Wong, strategist at OCBC FX. .
“A pause in the Fed’s hawkish re-pricing may dampen the momentum of the US and that could provide support for gold,” Wong continued.
Harish V., head of commodity research at Geojit Financial Services, said: “The combination of rising consumer spending to the highest in two years and strong jobs numbers published earlier in the month will give the Federal Reserve the confidence to raise interest rates to tackle inflation.”
gold forecast
After the price of gold fell below $1,820 over the past few days to its lowest level since the end of December, experts at Commerzbank predicted in a recent note that the yellow metal will witness a further decline in the short term.
“We envision a possible further setback in the short term,” the bank’s analysts continued.
The bank’s analysts said: “The noticeable rise in bond yields puts strong pressure on gold.”
“There is disappointment in gold blacks that the bank’s more restrictive policy is likely to see it leave its biggest mark in the gold market. That’s because in the US it has rallied again as a result.”
The bank’s economists made it clear that they expect it to face more headwinds and downward pressures during the coming period. As gold-traded investment funds witnessed a significant increase in outflows again during the past days, following expectations about the decisions of the US Federal Reserve, and the total outflows in the last five days of trading amounted to about 14.7 tons, which is equivalent to three tons per day.
The bank continued: “The outflows from gold ETFs were initially limited, which gave investors some hope of their recovery, but it seems that the marked increase in expectations of raising interest rates has eliminated those hopes at the present time.”
Dollar and gold now
It recorded an increase during the current moments, to reach levels near $ 1824 an ounce, by 0.4%.
And futures contracts for the yellow metal also rose during these moments of today’s trading, at levels near $ 1832 an ounce, by 0.35%.
While it fell in the current moments at the levels of 104.4 points, by 0.25%.
