Slowing US Economic Growth Could Make The Fed Dovish
The Fed's aggressive steps in fighting inflation marked by a signal that it will raise interest rates by 50 bps can make market participants hope for more aggressive hikes to occur. This caused the movement of world gold to weaken from the highest point in 1998 falling to 1870. Some market participants think that inflation that is too high can make the central bank aggressive in raising interest rates in the future, this can be proven by DXY which continues to hold at the level 103.
But we need to remember that there are supply chain disruptions caused by the lockdown in China, where this can cause supply chain disruptions that result in raw material shortages in several countries, coupled with several sanctions imposed by America on Russia, which is one of the largest energy producing countries. can also make things worse. From this, we can conclude that supply chain disruptions and rising energy prices can keep inflation in the 7-8% area. If business growth is experiencing problems due to supply chain disruptions, this can be seen by the minus DGP data yesterday. The Fed will automatically consider its policy to be aggressive in raising its interest rates. This can make gold a safe haven asset to protect itself from inflation.
Market Direction
By looking at the phenomenon above, it can be ascertained that the weakening of gold that is happening now will not last long because gold is predicted to experience a pullback against the dollar.
The above situation will have an impact on the Pair:
Pair XAU/USD Sideways tend to be bullish
Entry Buy area 1860-1830
Take Profit area 1900-1927
But we need to remember that there are supply chain disruptions caused by the lockdown in China, where this can cause supply chain disruptions that result in raw material shortages in several countries, coupled with several sanctions imposed by America on Russia, which is one of the largest energy producing countries. can also make things worse. From this, we can conclude that supply chain disruptions and rising energy prices can keep inflation in the 7-8% area. If business growth is experiencing problems due to supply chain disruptions, this can be seen by the minus DGP data yesterday. The Fed will automatically consider its policy to be aggressive in raising its interest rates. This can make gold a safe haven asset to protect itself from inflation.
Market Direction
By looking at the phenomenon above, it can be ascertained that the weakening of gold that is happening now will not last long because gold is predicted to experience a pullback against the dollar.
The above situation will have an impact on the Pair:
Pair XAU/USD Sideways tend to be bullish
Entry Buy area 1860-1830
Take Profit area 1900-1927
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