GOLD PRICE FORECAST: XAU/USD GALLOPS TO NEAR $1,950 AS US INFLATION SOFTENS BEYOND EXPECTATIONS

Gold price has climbed strongly to $1,950.00 as US inflation has softened more than expectations.

The US Dollar Index has plunged as the Fed would have the luxury of skipping interest rates further.

Gold price is expected to deliver an Inverted H&S breakout after surpassing the neckline plotted around $1,940.00.

Gold price (XAU/USD) has displayed a stellar run as the United States Bureau of Labor Statistics has reported softer-than-expected June Consumer Price Index (CPI) data. The monthly headline and core inflation has reported a pace of 0.3% while investors were anticipating a higher velocity of 0.3%.

Annualized headline CPI has softened to 3.0% vs. the consensus of 3.1% and the former release of 4.0%. While annualized inflation has decelerated to 4.8% against the estimates of 5.0% and the prior release of 5.3%. More-than-anticipated cool-down in inflationary pressures would trim expectations of an interest rate hike by the Federal Reserve (Fed) in its July monetary policy meeting.

Meanwhile, S&P500 futures have jumped strongly as soft inflation figures have eased fears of a recession in the United States. The US Dollar Index (DXY) has demonstrated a vertical fall to near the crucial support of 101.00. The yields offered on 10-year US Treasury bonds have sharply dropped to 3.88%.

Going forward, investors will focus on Thursday’s Producer Price Index (PPI) data. As per the consensus, monthly PPI is expected to register a pace of 0.2% vs. a contraction of 0.3%. It looks like a mild recovery in gasoline prices has propelled factory gate prices.