Although the US April Personal Consumption Expenditures (PCE) price index recorded its largest year-on-year increase since May 2023, the market expects the Federal Reserve to keep interest rates unchanged at its June meeting. Therefore, influenced by interest rate movements expectation, gold prices managed a rebound of nearly $150 from their intraday low yesterday before lacking sustained momentum. On the other hand, investors’ hopes for continued peace talks between the US and Iran, with each side offering its own terms, boosted their willingness to buy gold at lower prices, helping prices stabilize after falling to $4,366 yesterday.

However, if the short-term decline in US crude oil prices is less than expected, although the Federal Reserve may not consider raising interest rates in the short term, the overall inflationary pressure remains high, making a rate hike a likely possibility. This will suppress investors’ willingness to buy gold at higher levels. A short position can be established around $4,544, with a short-term bearish outlook for gold prices, targeting a level of $4,441 before taking profits, and a stop-loss at $4,564.

Gold price chart (1 hour):

Ferris Kwok

Chief Analyst
Success Finance Group

Email: ferris.kwok@successfn.com