Gold likely to be volatile next week as concerns over US CPI data loom

Gold Closed with a gain close to 0.70% in week gone by, erasing severe losses Federal Reserve Chair Powell’s Hawkish testimony. It Ended the week at $1867.24.

Gold The US banks are a concern. Silicon Valley Bank An default led to spillover concerns. Some Data in the US nonfarm payroll reports is slightly less than expected. February It also increased the metal’s strength.

Much Awaited US Nonfarm Payroll Report February The results showed that US employers added 311k jobs to their forecast of 205k.

While The headline figure was very impressive. It demonstrated that the US labour market remains strong. The rise in unemployment to 3.6% against expectations of 3.40%, and the average hourly earnings of 4.6% y/o y against the forecast at 4.70% y/o y gave some shine to the job report.

In A further indicator is that the labor force participation rate has risen to 62.50% February Starting at 62.40% January This helped to alleviate some of the concerns surrounding tight employment markets.

Silicon Valley Bank The regulators have taken down the (SVB) website. Federer Deposit Insurance Corporation (FDIC), has been chosen as the receiver. The Bank’s Failure saw investors flee to safety after they failed US Treasury Gold and silver

The Metal saw sharp declines in the short-end and longer-end yields. SVB is the US’s largest bank that has failed since Washington Mutual In 2008, at the height of the global financial crises (GFC),This Episode is reminiscent the GFC-era financial crisis, investors were therefore spooked by this episode Bank’s default.

The yields on US 10-year bonds fell by 7% over the week, while they settled at $3.704%. Now Markets are expecting a 25 bps drop in the rate of interest Fed The possibility of a 50 basis point increase at the next FOMC meets fades, thereby lowering the fund rate.

Notwithstanding The US has seen a sharp decline in its ten-year yields. Dollar Index Closed with a gain of 0.10% at 104.62.

Gold It is expected to receive support from credit risk concerns next week. However, the metal could give back some risk premium in the event that the US does not respond. Banking sector troubles look contained.

Next This week, investors will not only be monitoring the credit contagion threat, but they will also pay attention to the US CPI inflation data. Tuesday. As Mr Powell Rate hikes are now data dependent. We will likely see volatility from US inflation data next week.

Subdued Inflation may allow gold to overcome resistance at $1900 Support It is available at $1850/$1830

Gold The metal is showing positive signs by closing above stiff resistance at $1862.

(The AVP is the author. Fundamental Currency and Commodities Analyst at Sharekhan By BNP Paribas)

(Disclaimer: RecommendationsThe opinions, views, and suggestions of the experts are entirely theirs. These These views do not reflect the views of Economic Times)