Gold Prices Forecast: Dips Below $2,150 Amid Surging US PPI and Fed Rate Speculations

A higher-than-expected US Producer Price Index (PPI), which recorded a 1.6% year-over-year increase in February, pressured gold prices (XAU/USD) to retreat to close to weekly lows.

This data rekindled concerns about persistent inflation, challenging earlier expectations for a Federal Reserve rate cut and, consequently, escalating US Treasury yields and bolstering the US Dollar (USD). Such conditions typically redirect investment away from non-yielding assets like gold.

Initial Jobless Claims and Retail Sales Weigh on XAU/USD

The reported rise in producer prices suggests the Fed might sustain elevated rates, prompting gold’s dip below the crucial $2,150 threshold. Despite initial jobless claims falling unexpectedly to 209K, softening retail sales figures, which grew only 0.6% in February, underscored a consumer spending slowdown amid high inflation and borrowing costs.

Fed Rate Cut Expectations and Safe-Haven Demand

Despite the hawkish signals, a 60% chance of a June rate cut that markets have already priced in prevents gold from suffering further losses. Moreover, geopolitical tensions, highlighted by Russia’s nuclear armament moves into Belarus, enhance gold’s appeal as a safe-haven investment.

Investor focus is now divided between immediate US economic indicators and the upcoming FOMC meeting, which will be pivotal in shaping gold’s price forecast and confirming if the path to a $100,000 valuation is plausible.

Gold Price Forecast: Technical Outlook

Gold (XAU/USD) on March 15 traded slightly higher at $2,165.33, marking a 0.14% uptick. The precious metal’s pivot point is at $2,153.68, which is currently acting as a fulcrum for price direction.

Above this, gold faces resistance at $2,180.88, with further tests at $2,200.05 and $2,219.27 that may cap gains. Support levels are cast at $2,141.27, with additional backstops at $2,125.42 and $2,111.27, anchoring the price.

The RSI stands neutral at 51, suggesting a balance in market momentum, while the 50-day EMA at $2,148.97 provides underlying support, hinting at the potential for an ongoing uptrend. Overall, gold’s trend leans bullish as long as it remains above the $2,150 threshold.