Gold Price Forecast: Russian-Ukraine tensions keep US Dollar bid on PMI day Gold Ukraine PMI RiskAversion
economy came out better than expected, Gold price was sold on the release, as US Dollar stays bid across the board.
Markit Economics will also publish the February preliminary releases for the United States S&P Global PMIs in all sectors, expected to come in contraction territory across the board, but picking a bit of strength compared to January. If the S&P Global Services PMI show that rising wages continue to ramp up input price pressures, the US Dollar is likely to preserve its strength and limit the Gold price potential recovery gains.
If not, markets are unlikely to read too much into the FOMC Minutes ahead of the Fed March meeting, where the revised Summary of Projections will be unveiled.The US Bureau of Economic Analysis will publish on Friday at 13:30 GMT the Personal Consumption Expenditures , the Fed’s preferred gauge of inflation. Gold traders and investors will watch the data release closely, as Core PCE inflation is forecast to rise by 0.4% on a monthly basis. Still, the annual figure is expected to decline to 4.
Considering that the CPI report already revealed that inflation remained sticky in January, it would be surprising to see this data have a long-lasting impact on markets.Strategists at Commerzbank have noticed the correction in Gold price seen over the course of February and have adjusted their mid-year target for the yellow metal down in consequence:
“In response to the Fed’s steeper rate hikes – we now expect rates to peak at 5.5% – we have lowered our forecast of the mid-year Gold price to $1,800 . A lasting recovery should ensue in the second half of the year, however, as the US economy is then likely to experience a dip that will probably spark renewed expectations of rate cuts. We are therefore sticking with our year-end forecast of $1,950.
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