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01.07.2022 12:08 PM
Gold price outlook

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Yesterday's report showed that there is little relief from rising inflation, which continues to soar at a record pace. The Federal Reserve's inflation report and personal consumption expenditure price index were released yesterday. According to the PCE, year-on-year inflation stood at 6.3% in May, in line with the inflationary pressure in April.The PCE rose by 0.6% in May following an increase of 0.2% in April. However, the core PCE price index posted its weakest growth since November 2021. According to the report, on an annualized basis, the core PCE dipped to 4.7% in May, down slightly from 4.9% in April.The initial reaction to yesterday's inflation report caused a bullish market sentiment for gold. The report was expected to reduce the size of the next rate hike at the July FOMC meeting. However, such optimism was short-lived, because an hour and forty-five minutes later, gold was down to $1805.10. It is now continuing to fall.

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Yesterday's and today's price declines will lead to lower gold prices throughout the day, week, month and quarter. Yesterday's PCE price index will certainly be decisive for the Federal Reserve's decision to raise rates by 75 basis points at this month's FOMC meeting.

Irina Yanina,
Analytical expert of InstaForex
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