Gold is looking vulnerable in the coming week; resistance seen at $1965/$1987
gold closed with a loss of $1 at $1959.20 in an eventful week. Gold got some boost from the peak rate narrative as both the European Central Bank and the US Federal Reserve made it clear that they would adopt a data-dependent approach in deciding their monetary policies going forward. However, the much anticipated Federal Reserve pause is still elusive.
Global manufacturing and services PMIs data in the week were mostly disappointing. Composite PMI data of the Euro-zone, Germany, the UK, and the US lagged the forecast and edged lower from their respective prior readings. Germany's IFO business climate data for May at 87.30 fell short of the forecast of 88 and was lower than the previous reading of 88.60.
Most of the US data threw upside surprises with Philadelphia Fed non-manufacturing (June), FHFA House Price Index (May), Conference Board Consumer Confidence, advance estimate of Q2 GDP, personal consumption (Q2 A), durable goods orders (June), jobless claims and pending home sales (June) topped the forecast. US 2Q A annualized GDP reflected resilient consumer spending and strong business investment as the US economy recorded a growth of 2.40% QoQ that beat the forecast of 1.80%. The IMF upgraded its global growth forecast for 2023 to 3% from its previous forecast of 2.80% made in April as it sees the US economy growing 1.80% this year as compared to the April forecast of 1.60%.
As expected, the US Federal Reserve hiked the Fed fund rate by 25 bps to the 5.25%-5.50% range and kept its options going forward open. The Fed Chair Powell observed that inflation has proved to be more resilient than expected amid a strong job market as labor demand still substantially exceeds supply. The European Central Bank (ECB) hiked the
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