Next week’s calendar includes the minutes of the Fed’s June meeting, which will provide more clues about the US Fed’s monetary policy. In addition, US non-farm payroll data and June wage inflation data will follow. Since this and similar data have reflections on the gold and crypto markets, it will be in the focus of investors.
The latest situation in the gold and crypto market
cryptocoin.com As you can follow, gold prices remained in a range with differentiation this week. The precious metal fell in international markets. Over the past week, US GDP data, fears of slowdown and inflation continued to dominate the yellow metal movement. The leading crypto Bitcoin price dropped below the psychological level of $20,000 and remained there. The general cryptocurrency market, on the other hand, has not been able to recover yet, although it has made some jumps.
Looking to the future, it is possible that the tightening in global financial conditions will constrain the upward movement in the gold and crypto markets. On the other hand, the outlook for gold is volatile in the short term due to recession risks that increase the demand for safe haven for gold. Therefore, gold and crypto traders need to be wary of the main triggers that are expected to dominate price action next week.
Movements in the dollar index (DXY) are important for gold
Gold prices will react to many variables over the next week. The first and most important trigger will be the movement of the dollar index. The broad-based strength of the US dollar is putting pressure on dollar-denominated gold. After last week’s rally in DXY, where it held around two-year highs, it remains to be seen whether the dollar can pick up recent highs and move forward. Religare Broking Ltd. Sugandha Sachdeva, Vice President of Commodities and Currency Research, comments:
The price setup is showing some resistance at the 105.80 level, where any pressure in the dollar index will bolster the strength of the safe-haven precious metal.
Gold and crypto investors to follow FOMC minutes
Next week’s calendar, FOMC minutes. It includes the minutes of the Fed’s June meeting, which will provide more clues about the US Fed’s monetary policy path. Sugandha Sachdeva, in her latest hawkish remarks from the Fed Chair at the ECB forum, states that the Fed remains focused on getting inflation under control. He also says that he pointed to an aggressive rate hike stance at the July Meeting.
Markets will look at macroeconomic US data
Next week, US non-farm payrolls data (NFP) and June wage inflation data will be released. The data will provide insights into the US labor market. Therefore, it will direct the prices of gold and cryptocurrencies. NFP is expected to increase by 250,000 compared to a job increase of 390,000 in May. Average hourly earnings are expected to increase by 5.2% in line with May data. According to Sugandha Sachdeva, any negative surprises in the June jobs report are likely to bolster the bullish momentum below.
Weekly economic and financial comments
The Wells Fargo research team is evaluating the week’s events and data that are likely to impact the gold and crypto market. In this context, they make the following comments and analyzes.
As inflation continues and confidence drops sharply, consumers are running out of power. While consumers continue to rely on their balance sheets to support spending, it’s unclear how long they will continue to do so. Adding to the hard news is the weak ISM production report for June. The data shows weakness not only from the consumer, but also in investment spending.
This week, we got more evidence that the Chinese economy is on track to recover from the lockdown-induced slump. On the other hand, UK inflation is accelerating further this year. We expect the US economy to slow down later this year. Also, we expect it to enter recession in 2023. We believe that this too may be enough to plunge the UK economy into recession early next year.
Consumers increasingly rely on their balance sheets to finance their spending. As consumers took credit, a less traditional service, credit sales, received increasing attention. This week, we reveal what we know about the service, and more importantly, what we don’t know yet.
Policymakers accelerated monetary tightening cycles. However, inflation has risen uncomfortably in many countries around the world. The worldwide problem of inflation has created an interesting dilemma for the global economy. As a result, we made significant changes to our forecast profile for many central banks and economies.
