Daily Outlook on Gold by Dr. Renisha Chainani, Head of Research at Augmont
Below the Daily Outlook on Gold by Dr. Renisha Chainani, Head of Research at Augmont
Bullion prices rebound on rising inflation
* Gold continues to rise as Treasury yields fell due to better-than-expected US core inflation. As anticipated, the Consumer Price Index increased 2.9% YoY in December, surpassing the 2.7% increase in the prior month. The core CPI for the same period grew 3.2% year over year, which was less than the 3.3% growth recorded in November.
* In contrast to last week's projection of a 25 basis point rate cut, traders now predict the Fed may lower rates by 40 basis points by the end of 2025. Investors are anticipating the first rate cut at the June 18 meeting, according to the CME FedWatch Tool.
* The future outlook for gold looks very optimistic going forward, bolstered by several possible catalysts. The projected economic policies of the future Trump administration, such as more tax cuts and higher tariffs, could fuel inflationary pressure.
Technical Triggers
* Gold is on the verge of breaking its symmetrical triangle pattern at $2725 (~Rs 78900). If prices sustain above these levels, we could see gains towards $2760 (~Rs 79800).
* Silver prices have given a bullish breakout from its symmetrical triangle pattern by trading above $30.5 (~Rs 92500). If prices sustain above this level, we could see more gains up to $31.3 (~Rs 94500) and $32.3 (~Rs 97500).
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