ANALYSIS
NQ100 Finds Support from PPIApr 14
XAUUSD:Ounce Gold Hits 3-Month Lows on Interest Rate Expectations
On the day we left behind, the U.S. Senate gave its approval to Jerome Powell, who was nominated for a second term as chairman of the Federal Reserve (FED). Powell recalled that the main task of the FED is to bring inflation back under control and said that high-interest rates will be felt in this struggle. Indeed, in data released yesterday by the Labor Department, while the producer price index (PPI) fell from its peak of 11.12 percent in March to 11.00 percent in April, the high readings on core indicators pose upside risks to the inflation outlook in the months ahead. While the FED indicates that monetary tightening momentum will not abate, the expectation in the markets has been. Faced with this outlook, the dollar, strengthened by interest rate expectations, increased its pressure on asset prices, and yesterday the dollar index reached its highest level in 20 years, while the ounce of gold reached its lowest level in 3 months. As long as the price remains below the 100-period weighted moving average (WMA), which is decisive for the medium-term outlook of the yellow metal, resolutions to the 1805 and 1786 supports are observed on the current downward path. If the 100 WMA, which points to 1866, the intermediate resistance above 1844, is breached, the 1882 level could come to the fore.
