GOLD: Higher Fed US Inflation Outlook Offsetting Middle East Risks
Gold has not benefited from the risk off move in equities from continued geopolitical uncertainty as the Fed signalled it is on hold for now and revised its inflation forecasts higher. Bullion has traded in a narrow range during today’s APAC session. It rose to a high of $3387.98/oz earlier, below initial resistance at $3451.3, but then trended lower to around $3370 remaining above initial support at $3344.8. It is currently up 0.1% to $3372.9. The USD index is also off its intraday peak to be up slightly.
- 50bp of easing by end 2025 is still in the Fed’s forecast. It wants to take more time to assess the impact of current uncertainties, particularly around trade, before deciding if it needs to change policy. The FOMC believes that tariffs will impact inflation as they are passed on through the chain but its concern is if it turns into an inflation problem.
- Silver is down 0.2% to $36.67 off the intraday low of $36.60. It reached $36.78 earlier remaining below initial resistance at $37.32. The bull wave remains in place after breaking above the bull trigger at $34.90 as the metal has also benefited from safe-haven flows. Initial support is at $34.18, 20-day EMA.
- Equities are generally weaker with the Hang Seng down 2.0% and S&P e-mini -0.2%. Oil prices are down slightly with WTI -0.1% to $73.42/bbl. Copper is 0.4% lower.
- Later the SNB and BoE announce decisions. The ECB’s Lagarde, de Guindos and Buch speak. April euro area construction prints. The US is closed for a holiday.
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