Can Gold Price (XAUUSD) Hit High Levels Again!? Is Recession Coming To US Economy!? Jerome Powell (FED) Is About To Speak!

[FXMAG]

Summary: With a tug of war between inflation and recession concerns ensuing, central bank speakers (such as Fed Chair Powell’s testimony) and economic data (such as flash PMIs) will continue to be parsed closely in the week ahead. Asia’s trade and inflation data also out this week will press further the need for further tightening in the region. Commodities start to be pressured as well - we have an energy crisis brewing in Australia and US gasoline developments will be key. Focus will shift further away from industrial metals as China lockdowns will likely linger, to safe havens like Gold.

Powell’s testimony to the government
Fed Chair Powell delivers his semi-annual testimony on monetary policy before the US Senate Banking Committee in the week ahead. He will likely be grilled on what a more aggressive Fed could mean for jobs and the economy. This could be key as the debate around a 50 vs 75bps rate hike in July is still open.

US recession fears continue to get tested
A series of Fed surveys are due from the US this week, which will be scrutinized to signal if there are risks of a recession on the horizon. These include the Chicago Fed National Activity index, Kansas City Fed Manufacturing Activity index, as well as the final print of University of Michigan sentiment index. Also on the horizon is the preliminary print of the S&P Markit manufacturing PMI for June which is seen to be slowing down from May’s print of 57, but still remain strongly in expansion. Services PMI is however likely to gain some strength. Meanwhile, US home sales are tipped to show further strain on Wednesday with existing home sales data out for May. Gold (XAUUSD) is likely to see more strength if data disappoints, suggesting that stagflation fears are on the rise.

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