Location & Language

Zenfinex Global Limited regulated by the Financial Services Authority (FSA) of Seychelles (SD092)

Gold Slumps Below $2,000 on Hawkish Inflation Data, Dampening Rate Cut Hopes

By Camilo Botia

Gold prices plunged below the critical $2,000 per ounce mark, hitting a two-month low on Tuesday, as a hotter-than-expected U.S. inflation report dashed hopes of an early interest rate cut from the Federal Reserve.

 

 

The key data point showed U.S. consumer prices rising more than anticipated in January, driven by surging shelter and healthcare costs. This news sent shockwaves through the market, causing a sell-off in gold and bolstering the U.S. dollar.

 

 

The report has been perceived as disappointing as investors were hoping for a Fed rate cut in May, with the chances now below 50%.
The rise in inflation raises the prospect of the Fed maintaining its hawkish stance and delaying rate cuts until June or later. Higher interest rates reduce the appeal of holding non-yielding assets like gold, as they increase the opportunity cost compared to interest-bearing alternatives.
The stronger dollar, up 0.7% to a three-month high, weighed on gold’s appeal. A rise in the dollar makes gold more expensive for buyers using other currencies.

 

The inflation data pushed down prices sharply lower. Gold is trading below $2,000 with a daily high at its 50-day moving average and a daily low at its 100-day moving averages, which now work as resistance and support levels. Some investors are worried that a drop below $1,950 could trigger a bearish gold market, but to reach this level, gold will have to break two more supports, one at $1,978.00 and below its 200-day moving average at $1,965.47. So far, the market is still not in an oversold condition, as shown by the RSI indicator.

 

The market’s focus now shifts to Thursday’s retail sales data and Friday’s producer price index (PPI) numbers. Additionally, investors will be monitoring comments from Fed officials this week, who have emphasized the need for further evidence of sustained inflation decline before considering rate cuts.

Back

Popular Posts

Will Oil Break Resistance? Markets Await the Next Move

Gold Prices Maintain Bullish Momentum Backed by Geopolitical and Technical Factors

Overview of Last Week’s Key Economic Events

Economic Data Drives NZD Higher Despite RBNZ Rate Cut

Lorem Ipsum

Lorem ipsum dolor sit amet, consectetur adipiscing elit.

Here are some related articles you may find interesting:

Market Insights​

June 4, 2025

Will Oil Break Resistance? Markets Await the Next Move

Crude oil prices have been trading in a sideways range between $62 and $66.75 over the past month, currently hovering around the $65 mark. There...

Market Insights​

June 3, 2025

Gold Prices Maintain Bullish Momentum Backed by Geopolitical and Technical...

Gold prices continue to rise for the fifth consecutive month. On April 22, gold hit a record high of $3,500 before pulling back to $3,121...

Market Insights​

June 2, 2025

Overview of Last Week’s Key Economic Events

Last week witnessed the release of several major global economic indicators. In the United States, data showed a slowdown in some metrics, with the Core...

Market Insights​

May 29, 2025

Economic Data Drives NZD Higher Despite RBNZ Rate Cut

The Reserve Bank of New Zealand (RBNZ) cut interest rates by 25 basis points in its meeting yesterday, lowering the official cash rate from 3.50%...

Ready to Elevate Your Trading Journey?

Open a Taurex account and start trading today.

We’re Sorry

Access to tradetaurex.com
is unavailable in your region

tradetaurex.com is required to abide by global laws and therefore the information on this site is not directed at residents of the United States, Canada, North Korea, Iran, Myanmar, Belgium, Spain, France, Japan, South Korea or any particular countries and is not intended for distribution to, or use by, any person in an country or jurisdiction where such distribution or use would be contrary to local law or regulation.

Live account Registration

1 Hour Trading Consultation

Chat on WhatsApp
This site is registered on wpml.org as a development site. Switch to a production site key to remove this banner.