Last week, in the US, critical inflation data was released below expectations, while the Dollar Index continued its weak performance. The political uncertainty environment continues to benefit precious metals. Especially with inflation figures below expectations, the likelihood of the FED lowering interest rates is increasing day by day.
As we approach the end of the first quarter, political uncertainty continues to deepen sales in US stock markets. On the other hand, the decision by US Treasury Secretary Scott Bessent on oil production, along with the pullback in oil prices, continues to support the decline in US inflation.
This week, Wednesday will be a particularly critical day for the US! The FED Interest Rate Decision and FED Chairman Powell's speech will be the main focus of the markets. We do not expect any changes in interest rates, at least for now. However, Powell’s comments, particularly regarding future questions on the political process, will be very important. The FED Chairman did not make any comments about Trump’s policy in the previous meeting, but if an early interest rate cut due to Trump’s policy is perceived by the markets, the positive atmosphere in precious metals may continue.
On the precious metals front, it is a topic of great interest whether we will see a daily close above the psychological resistance of the $3000 level, which we have been waiting for a long time. Especially Trump’s period of uncertainty, the increasing likelihood of FED interest rate cuts, and the re-emergence of geopolitical risks are factors supporting gold. Technically, if it holds above the $2872 level, positive movement in gold is likely to continue. The fibonacci levels of $3030 and $3125 can be set as short/medium-term targets.
Of course, alongside the movement in gold, gram gold prices in Turkey have also reached historical record levels. The interest rate cuts by the Central Bank of Turkey (CBRT) have caused a slight upward movement in the exchange rate policy, and the price of gram gold in the Grand Bazaar has set a new record, trading at 3560 TRY this week. While the premiums on gold in Turkey have risen by $20 per ounce, the difference in kilograms compared to the London market is around $700.
According to CME FED Watch, the probability of a 0.25 basis point rate cut in July is priced at 48%.
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