GOLD (June 30) What's next if chances of a recession are "slim"

In Asian trading on Friday, gold struggled to take advantage of overnight recovery, trading in the range of $1,893-$1,892. The precious metal traded below $1,910 and remained largely unchanged as traders awaited the release of key inflation data from the US before making any new bets.

The PCE is the Fed's preferred inflation measure and could impact expectations for future interest rate hikes. This will significantly affect the momentum of the USD and help determine the next direction for gold prices. The USD is currently strengthening, reaching its highest level since June 13.

Comment:

From a technical standpoint, the round number $1,900 is currently acting as immediate support, with overnight lows fluctuating around $1,893-$1,892. Further selling activity could confirm negative prospects and potentially push Gold prices down towards the challenging level of $1,840.

On the other hand, any positive move above the $1,913 level or an overnight high could face resistance near the $1,924-$1,925 range, before reaching the $1,936 area. Sustained strength above that could trigger a short-term rally towards the $1,962-$1,964 barrier, on the way to the supply zone of $1,970-$1,972.

Comment:

Friday, the U.S. Department of Commerce said its core Personal Consumption Expenditures price index increased 0.3% last month, compared to April's increase of 0.4%. The inflation rose in line with economists' expectations.

Meanwhile, inflation in the last 12 months rose 4.6%, down a tick from April's 4.7% increase. Annual inflation was slightly cooler than expected as economists forecasted an unchanged reading. However, looking at the broader trend, inflation remains stubbornly high, more than double the Federal Reserve's target of 2%.