ALB Limited 30.03.2023

Gold Prices Pull Back as Risk Appetite Rebound

Last week, the global appetite for risk started to recover with the statements made by US officials about the guarantee given to the depositors and the acquisition of Credit Suisse by UBS. China-based online trade giant Alibaba made announcement that it has decided to divide its 220 billion dollar operations into six units to stand out as a factor supporting the global risk appetite. Gold prices remain weak as concerns over the banking crisis fade and global risk appetite increases, and the dollar's efforts to recoup its weekly losses on the new trading day While the dollar index strengthened compared to yesterday and rose to 102.4 levels, an ounce of gold depreciated by close to 0.70%. We see a shift from safe harbors to risky assets.


What Will Happen to Gold Prices After PCE Data?


Investors' full attention will be on the US PCE deflator data, which will be announced on Friday. Each data set is of great importance for the decisions to be made by the FED policymakers. PCE inflation, followed by the FED, continues to be well above the target. It is expected that the PCE inflation data will be higher than expected, pushing interest rate expectations up. From a technical point of view, if the PCE inflation data come in above expectations, it can be expected that the dollar index will strengthen and gold prices will remain under pressure. USD 1,960 is the first support level, while USD 1,930 can be followed as the second support. On the other hand, we will be watching the USD 1.975 and USD 2,000 levels as resistance points for possible rises under an ounce.

Tags: us, credit suisse, gold, gold prices

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