By Brad Young and Katie Williams, from the Money team

UK residents spend billions of pounds abroad each year, but it can be difficult to know how to make sterling go as far as possible.

With summer fast approaching, so too are the opportunities to splash out on holidays, so the Money team spoke with three travel experts to find out when, where and how to pay abroad.

CREDIT CARD

“The cheapest way to spend overseas is often on plastic, if you’ve got the right plastic,” said James Jones, head of consumer affairs at Experian.

“Using credit and debit cards can be a great way to get the very best exchange rates.”

He said rates offered by currency exchange shops are usually “much less attractive” than those offered on some cards, which were much closer to the rates the banks use themselves.

Fees could wipe out any gains

But it’s essential to be aware of things like non-sterling transaction fees, cash withdrawal fees and credit card interest.

So shop around for a card with travel rewards, Mr Jones said – and do this before your trip.  

“You probably need to give yourself, ideally, six weeks.”

Extra protection

When you book a trip between £100 and £30,000, try and pay for some of it on a credit card to get “extra protection” under section 75 of the Consumer Credit Act, said Mr Jones.

That means the card provider is jointly responsible with the retailer if something goes wrong, such as arriving at a hotel only to find it has closed down.

If you are using a credit card, make sure you are can pay it off in full to avoid interest charges, said Sean Tipton from the Association of British Travel Agents (ABTA).

One trap you must not falling into

An increasingly common trap when paying with card (credit or debit) is being presented with the option to pay in the local currency or in pounds, said Mr Jones and Mr Tipton.

While paying in sterling might “seem like a wonderful convenience” you will ultimately be paying “quite a bit more for the purchase”, Mr Jones said.

If you pay in pounds, the local retailer’s bank sets the exchange rate, but if you pay in the local currency, your UK bank sets the rate.

DEBIT CARDS

“Some service providers don’t apply fees for overseas use on their regular UK debit cards,” says Moneyfacts – but you must always check as some incur big fees.

Alternatively, “some service providers offer specialist travel debit cards that don’t impose non-sterling transaction fees and cash withdrawal fees”.

PREPAID TRAVEL CARDS

If you’re looking to avoid a credit check, prepaid cards can be loaded with multiple currencies and work like a debit card, without being connected to your bank.

“Typically, prepaid travel cards will offer competitive or even no charges for foreign usage, which can make them a cheaper alternative to using a normal credit or debit card while on holiday,” says MoneyFacts.

One of the most popular prepaid cards, Revolut, uses its own exchange rates, which might not always be the best you can find – and while it is fee free on weekdays, there are charges at weekends, so do your research.

Also be aware – prepaid cards do not offer purchase protection like a credit card and aren’t regulated by the Financial Conduct Authority.

CASH

“Don’t rely solely on a card – it can backfire on you if you do,” said Mr Tipton.

Some taxis only take cash, leaving you to face hefty charges withdrawing from an ATM.

In some countries, like Argentina, it can be difficult to get money out of ATMs without a local bank account, Mr Tipton said.

Mr Jones added: “If you’re in a very remote part of the world that actually doesn’t have many ATMs and maybe where cash is king, then that might dictate what you need to do.”

Where and when to get cash

“I’d strongly recommend [to] get some cash out in the UK,” said Mr Tipton.

It can be difficult to find a bureau de change in some developing nations, and ATMs have “started introducing quite hefty charges” across the board, he said.

The exceptions are countries with really high inflation rates, where it may make more sense to get cash out when you arrive, he added.

When to exchange currency really depends on the destination, said Laura Plunkett, head of travel money at the Post Office.

“Exchange rates change frequently, so if you have time, do your homework and lock in a rate when it is good.”

What is a good exchange rate for Europe?

Some 80% of British holidays abroad take place in the Eurozone, said Mr Tipton.

The rate has remained “fairly stable”, but if you see the pound increasing in value that may be the time to buy a larger amount of Euros for a couple of years in advance, he added.

Mr Tipton said 1.2 to the pound is a “pretty healthy” time to buy, but “it is a bit of a lottery”.

Every year the pound gets stronger against the South African rand, and the same in Argentina, where the peso is “unbelievably weak”, Mr Tipton suggested.

In store or online?

“Most online suppliers will insist on a minimum order value that might be too high for some people, and you’ll have to make sure that you’re home for when it’s delivered,” said Ms Plunkett.

“But typically, rates are better online if that’s an option for you.”

By Brad Young and Katie Williams, from the Money team

UK residents spend billions of pounds abroad each year, but it can be difficult to know how to make sterling go as far as possible.

With summer fast approaching, so too are the opportunities to splash out on holidays, so the Money team spoke with three travel experts to find out when, where and how to pay abroad.

CREDIT CARD

“The cheapest way to spend overseas is often on plastic, if you’ve got the right plastic,” said James Jones, head of consumer affairs at Experian.

“Using credit and debit cards can be a great way to get the very best exchange rates.”

He said rates offered by currency exchange shops are usually “much less attractive” than those offered on some cards, which were much closer to the rates the banks use themselves.

Fees could wipe out any gains

But it’s essential to be aware of things like non-sterling transaction fees, cash withdrawal fees and credit card interest.

So shop around for a card with travel rewards, Mr Jones said – and do this before your trip.  

“You probably need to give yourself, ideally, six weeks.”

Extra protection

When you book a trip between £100 and £30,000, try and pay for some of it on a credit card to get “extra protection” under section 75 of the Consumer Credit Act, said Mr Jones.

That means the card provider is jointly responsible with the retailer if something goes wrong, such as arriving at a hotel only to find it has closed down.

If you are using a credit card, make sure you are can pay it off in full to avoid interest charges, said Sean Tipton from the Association of British Travel Agents (ABTA).

One trap you must not falling into

An increasingly common trap when paying with card (credit or debit) is being presented with the option to pay in the local currency or in pounds, said Mr Jones and Mr Tipton.

While paying in sterling might “seem like a wonderful convenience” you will ultimately be paying “quite a bit more for the purchase”, Mr Jones said.

If you pay in pounds, the local retailer’s bank sets the exchange rate, but if you pay in the local currency, your UK bank sets the rate.

DEBIT CARDS

“Some service providers don’t apply fees for overseas use on their regular UK debit cards,” says Moneyfacts – but you must always check as some incur big fees.

Alternatively, “some service providers offer specialist travel debit cards that don’t impose non-sterling transaction fees and cash withdrawal fees”.

PREPAID TRAVEL CARDS

If you’re looking to avoid a credit check, prepaid cards can be loaded with multiple currencies and work like a debit card, without being connected to your bank.

“Typically, prepaid travel cards will offer competitive or even no charges for foreign usage, which can make them a cheaper alternative to using a normal credit or debit card while on holiday,” says MoneyFacts.

One of the most popular prepaid cards, Revolut, uses its own exchange rates, which might not always be the best you can find – and while it is fee free on weekdays, there are charges at weekends, so do your research.

Also be aware – prepaid cards do not offer purchase protection like a credit card and aren’t regulated by the Financial Conduct Authority.

CASH

“Don’t rely solely on a card – it can backfire on you if you do,” said Mr Tipton.

Some taxis only take cash, leaving you to face hefty charges withdrawing from an ATM.

In some countries, like Argentina, it can be difficult to get money out of ATMs without a local bank account, Mr Tipton said.

Mr Jones added: “If you’re in a very remote part of the world that actually doesn’t have many ATMs and maybe where cash is king, then that might dictate what you need to do.”

Where and when to get cash

“I’d strongly recommend [to] get some cash out in the UK,” said Mr Tipton.

It can be difficult to find a bureau de change in some developing nations, and ATMs have “started introducing quite hefty charges” across the board, he said.

The exceptions are countries with really high inflation rates, where it may make more sense to get cash out when you arrive, he added.

When to exchange currency really depends on the destination, said Laura Plunkett, head of travel money at the Post Office.

“Exchange rates change frequently, so if you have time, do your homework and lock in a rate when it is good.”

What is a good exchange rate for Europe?

Some 80% of British holidays abroad take place in the Eurozone, said Mr Tipton.

The rate has remained “fairly stable”, but if you see the pound increasing in value that may be the time to buy a larger amount of Euros for a couple of years in advance, he added.

Mr Tipton said 1.2 to the pound is a “pretty healthy” time to buy, but “it is a bit of a lottery”.

Every year the pound gets stronger against the South African rand, and the same in Argentina, where the peso is “unbelievably weak”, Mr Tipton suggested.

In store or online?

“Most online suppliers will insist on a minimum order value that might be too high for some people, and you’ll have to make sure that you’re home for when it’s delivered,” said Ms Plunkett.

“But typically, rates are better online if that’s an option for you.”

Uptrend Line Support Tested

The next area to watch for support activity is around the uptrend line and it was reached today. But if the line fails to hold the next lower price zone is around 2.84 to 2.82, consisting of a crossover of two trendlines and the 50% retracement, respectively. The uptrend line is a relatively short-term line having defined support of the rising trend starting from the April swing low of 1.58. It is used as a guide and is not so reliable without confirming evidence.

Trends Adjust

Given that the angle of ascent has been relatively steep, an adjustment to a lower slope angle would be common and healthy for the trend. Rising trends that start steep will eventually reach a point where demand can no longer support the price momentum and they will adjust to a lower slope. Alternatively, uptrends that start with a low slope angle typically see the angle increase as the trend progresses. Frequently, there are three angles that might be observed in either scenario.

Potentially Bearish Weekly Pattern

What about the weekly time frame? The weekly chart is about to close the week with a bearish shooting star pattern. But before being alarmed notice that three weeks ago ended with a similar candlestick pattern. It was followed by a resumption of the uptrend after a brief drop below the bearish week. That was followed by a three-week continuation of the uptrend until this week’s high of 3.16.

Pennant Pattern Points to 3.78

The breakout of the bull pennant just got started and if it follows through it projects an initial target up to 3.78. That target is above the 2023 high of 3.64. Nonetheless, the main point is that there looks to be more upside in natural gas for the current trend. The target may be reached or not, but it is supportive of a continuation higher above this week’s high once the retracement is complete.

For a look at all of today’s economic events, check out our economic calendar.

U.S. crude oil was on pace Friday to break a three-week losing streak as analysts see a tighter market heading into the third quarter.

Oil prices are up more than 3% this week as summer fuel demand is expected to reduce inventories in the coming weeks, even though the season has gotten off to a tepid start.

Spot Prices ($/MMBtu)	Thu, 06-Jun	Fri, 07-Jun	Mon, 10-Jun	Tue, 11-Jun	Wed, 12-Jun
Henry Hub	2.29	2.44	2.63	2.72	2.80
New York	1.44	1.17	1.32	1.35	1.79
Chicago	1.69	1.52	1.84	1.82	2.23
Cal. Comp. Avg.*	1.61	1.55	1.76	1.81	1.76
*Avg. of NGI’s reported prices for: Malin, PG&E Citygate, and Southern California Border Avg.
Data source: NGI’s Daily Gas Price Index

U.S. natural gas supply – Gas Week: (6/6/24 – 6/12/24)
	Average daily values (billion cubic feet)
	this week	last week	last year
Marketed production	112.5	112.8	116.1
Dry production	99.3	99.6	102.7
Net Canada imports	5.8	5.4	5.1
LNG pipeline deliveries	0.1	0.1	0.1
Total supply	105.2	105.1	107.8
Data source: S&P Global Commodity Insights Note: This table reflects any data revisions that may have occurred since the previous week’s posting. Liquefied natural gas (LNG) pipeline deliveries represent natural gas sendout from LNG import terminals.

U.S. natural gas consumption – Gas Week: (6/6/24 – 6/12/24)
	Average daily values (billion cubic feet)
	this week	last week	last year
U.S. consumption	68.6	67.5	68.3
Power	37.8	36.1	37.0
Industrial	21.6	21.8	21.8
Residential/commercial	9.2	9.6	9.6
Mexico exports	7.0	6.9	6.7
Pipeline fuel use/losses	8.6	8.5	8.8
LNG pipeline receipts	12.9	13.2	11.6
Total demand	97.1	96.1	95.4
Data source: S&P Global Commodity Insights Note: This table reflects any data revisions that may have occurred since the previous week’s posting. Liquefied natural gas (LNG) pipeline receipts represent pipeline deliveries to LNG export terminals.

Rigs
	Tue, June 04, 2024	Change from
		last week	last year
Oil rigs	492	-0.8%	-11.5%
Natural gas rigs	98	-2.0%	-27.4%
Note: Excludes any miscellaneous rigs

Rig numbers by type
	Tue, June 04, 2024	Change from
		last week	last year
Vertical	20	0.0%	5.3%
Horizontal	531	-0.9%	-15.0%
Directional	43	-2.3%	-15.7%
Data source: Baker Hughes Company

Working gas in underground storage
	Stocks billion cubic feet (Bcf)
Region	2024-06-07	2024-05-31	change
East	603	575	28
Midwest	712	688 R	24
Mountain	224	218	6
Pacific	276	273	3
South Central	1,159	1,146	13
Total	2,974	2,900  R	74
R=Revised. Working gas stocks were revised to reflect resubmissions of data during the five-week period from May 3, 2024, to May 31, 2024, increasing stocks by 6 Bcf to 9 Bcf for each week during this period. The reported revisions caused the stocks for May 31, 2024, to change from 2,893 Bcf to 2,900 Bcf, and working gas stocks for the week ending May 24, 2024, changed from 2,795 Bcf to 2,804 Bcf. As a result, the implied net change between the weeks ending May 31, 2024, and May 24, 2024, changed from 98 Bcf to 96 Bcf. More information about the revised working gas levels can be found at: https://ir.eia.gov/ngs/ngshistory.xls. Data source: U.S. Energy Information Administration Form EIA-912, Weekly Underground Natural Gas Storage Report Note: Totals may not equal sum of components because of independent rounding.

Working gas in underground storage
	Historical comparisons
	Year ago 6/7/23		5-year average 2019-2023
Region	Stocks (Bcf)	% change	Stocks (Bcf)	% change
East	568	6.2	485	24.3
Midwest	624	14.1	558	27.6
Mountain	145	54.5	138	62.3
Pacific	173	59.5	232	19.0
South Central	1,102	5.2	989	17.2
Total	2,610	13.9	2,401	23.9
Data source: U.S. Energy Information Administration Form EIA-912, Weekly Underground Natural Gas Storage Report Note: Totals may not equal sum of components because of independent rounding.

Temperature – heating & cooling degree days (week ending Jun 06)
	HDDs			CDDs
Region	Current total	Deviation from normal	Deviation from last year	Current total	Deviation from normal	Deviation from last year
New England	12	-16	-36	12	7	1
Middle Atlantic	7	-13	-13	21	6	6
E N Central	12	-12	4	24	0	-12
W N Central	7	-14	7	36	6	-23
South Atlantic	4	-2	1	66	6	13
E S Central	2	-3	2	62	9	-1
W S Central	0	-1	0	95	11	16
Mountain	16	-18	-11	49	11	22
Pacific	11	-13	-13	15	-1	12
United States	8	-11	-4	42	5	5
Data source: National Oceanic and Atmospheric Administration Note: HDDs=heating degree days; CDDs=cooling degree days

   Average temperature (°F)

   7-day mean ending Jun 06, 2024

        Data source: National Oceanic and Atmospheric Administration

  Deviation between average and normal temperature (°F)

   7-day mean ending Jun 06, 2024

        Data source: National Oceanic and Atmospheric Administration

Monthly U.S. dry shale natural gas production by formation is available in the Short-Term Energy Outlook.

XAU/USD Current price: $2,297.49

• Softer-than-anticipated US Producer Price Index figures temporarily boosted the mood.
• Wall Street’s poor performance reflects a sour mood, backing demand for the US Dollar.
• XAU/USD turned bearish and aims to pierce the weekly low at $2,286.69.

After a volatile Wednesday, the US Dollar recovered the ground lost following United States (US) first-tier events, pushing higher even against the safe-haven Gold in a risk-averse environment. XAU/USD trades below $2,300 a troy ounce, trimming weekly gains.

The US Dollar turned lower mid-European morning following the release of encouraging US inflation-related data. The US Bureau of Labor Statistics (BLS) reported that the Producer Price Index (PPI)  rose 2.2% YoY in May, easing from the 2.3% increase posted in April and below expectations for a 2.5% advance. On a monthly basis, the PPI declined by 0.2%.

The optimism was short-lived as US indexes turned sharply lower after the opening, pushing the Greenback higher across financial boards. At the time being, only the Nasdaq Composite trades in the green, up a modest 0.29%. The Dow Jones Industrial Average is the worst performer, down 225 points.

The upcoming Asian session will bring the Bank of Japan’s (BoJ) monetary policy decision. Market participants speculate the central bank will probably leave interest rates unchanged, although policymakers may also announce a reduction in bond purchases.

XAU/USD short-term technical outlook

The daily chart for XAU/USD shows that the risk of a bearish breakout has increased. The pair is trading below a firmly bearish 20 Simple Moving Average (SMA), while technical indicators resumed their slides within negative levels, in line with another leg lower. The 100 and 200 SMAs keep heading higher well below the current level, although they remain too far to become relevant. The weekly low at $2,286.69 is the immediate support level.

In the near term, and according to the 4-hour chart, the bearish case is even stronger. XAU/USD accelerated south after sliding below a now flat 20 SMA. Furthermore, the 100 SMA is crossing below the 200 SMA, both far above the shorter one. Finally, technical indicators crossed their midlines into negative territory, and maintain firmly bearish slopes, reflecting persistent selling interest.

Support levels: 2,286.70 2,271.90 2,258.30

Resistance levels: 2,308.80 2,321.55 2,333.10 

Uptrend Line Shows Dynamic Support

An uptrend line marks dynamic support for the current advance that began from the April 25 swing low. Also, the downtrend line identifies a price area for potential support. If the uptrend line is broken the downtrend line is the next line to watch for possible support. The two lines cross at a price of 2.84, marking another price to watch. That price area can be watched along with this week’s low of 2.86.

A little lower is the important 20-Day MA at 2.75. Notice that the 20-Day line has now converged with the top boundary line of the pennant pattern. Each is marking a similar price support area. It is also interesting that the day the 20-Day MA hit the bottom boundary line of the pennant on June 6, was the day of the pennant breakout. Although it closed weak, the next day’s upside continuation made up for it.

Trend Anticipated to Resume Following Minor Retracement

Given the strong bullish behavior of natural gas during the current ascent, higher targets remain in sight. At the same time, the relative strength index momentum oscillator (RSI) is beginning to show signs of a bearish divergence. It is still early though but should be watched as the trend progresses.

Breakout Above 3.09 Shows Strength

Given today’s pullback, a rally above the day’s high of 3.09 provides a sign of strength. The next higher target zone, above the nearby 3.18 to 3.20 Fibonacci confluence zone, is the 3.39 swing high from early-January. Nevertheless, a decisive breakout above this week’s high of 3.16 has a good chance of exceeding that swing high eventually, if not on the first approach.

For a look at all of today’s economic events, check out our economic calendar.

XAU/USD Current price: $2,297.49

• Softer-than-anticipated US Producer Price Index figures temporarily boosted the mood.
• Wall Street’s poor performance reflects a sour mood, backing demand for the US Dollar.
• XAU/USD turned bearish and aims to pierce the weekly low at $2,286.69.

After a volatile Wednesday, the US Dollar recovered the ground lost following United States (US) first-tier events, pushing higher even against the safe-haven Gold in a risk-averse environment. XAU/USD trades below $2,300 a troy ounce, trimming weekly gains.

The US Dollar turned lower mid-European morning following the release of encouraging US inflation-related data. The US Bureau of Labor Statistics (BLS) reported that the Producer Price Index (PPI)  rose 2.2% YoY in May, easing from the 2.3% increase posted in April and below expectations for a 2.5% advance. On a monthly basis, the PPI declined by 0.2%.

The optimism was short-lived as US indexes turned sharply lower after the opening, pushing the Greenback higher across financial boards. At the time being, only the Nasdaq Composite trades in the green, up a modest 0.29%. The Dow Jones Industrial Average is the worst performer, down 225 points.

The upcoming Asian session will bring the Bank of Japan’s (BoJ) monetary policy decision. Market participants speculate the central bank will probably leave interest rates unchanged, although policymakers may also announce a reduction in bond purchases.

XAU/USD short-term technical outlook

The daily chart for XAU/USD shows that the risk of a bearish breakout has increased. The pair is trading below a firmly bearish 20 Simple Moving Average (SMA), while technical indicators resumed their slides within negative levels, in line with another leg lower. The 100 and 200 SMAs keep heading higher well below the current level, although they remain too far to become relevant. The weekly low at $2,286.69 is the immediate support level.

In the near term, and according to the 4-hour chart, the bearish case is even stronger. XAU/USD accelerated south after sliding below a now flat 20 SMA. Furthermore, the 100 SMA is crossing below the 200 SMA, both far above the shorter one. Finally, technical indicators crossed their midlines into negative territory, and maintain firmly bearish slopes, reflecting persistent selling interest.

Support levels: 2,286.70 2,271.90 2,258.30

Resistance levels: 2,308.80 2,321.55 2,333.10 

XAU/USD Current price: $2,297.49

• Softer-than-anticipated US Producer Price Index figures temporarily boosted the mood.
• Wall Street’s poor performance reflects a sour mood, backing demand for the US Dollar.
• XAU/USD turned bearish and aims to pierce the weekly low at $2,286.69.

After a volatile Wednesday, the US Dollar recovered the ground lost following United States (US) first-tier events, pushing higher even against the safe-haven Gold in a risk-averse environment. XAU/USD trades below $2,300 a troy ounce, trimming weekly gains.

The US Dollar turned lower mid-European morning following the release of encouraging US inflation-related data. The US Bureau of Labor Statistics (BLS) reported that the Producer Price Index (PPI)  rose 2.2% YoY in May, easing from the 2.3% increase posted in April and below expectations for a 2.5% advance. On a monthly basis, the PPI declined by 0.2%.

The optimism was short-lived as US indexes turned sharply lower after the opening, pushing the Greenback higher across financial boards. At the time being, only the Nasdaq Composite trades in the green, up a modest 0.29%. The Dow Jones Industrial Average is the worst performer, down 225 points.

The upcoming Asian session will bring the Bank of Japan’s (BoJ) monetary policy decision. Market participants speculate the central bank will probably leave interest rates unchanged, although policymakers may also announce a reduction in bond purchases.

XAU/USD short-term technical outlook

The daily chart for XAU/USD shows that the risk of a bearish breakout has increased. The pair is trading below a firmly bearish 20 Simple Moving Average (SMA), while technical indicators resumed their slides within negative levels, in line with another leg lower. The 100 and 200 SMAs keep heading higher well below the current level, although they remain too far to become relevant. The weekly low at $2,286.69 is the immediate support level.

In the near term, and according to the 4-hour chart, the bearish case is even stronger. XAU/USD accelerated south after sliding below a now flat 20 SMA. Furthermore, the 100 SMA is crossing below the 200 SMA, both far above the shorter one. Finally, technical indicators crossed their midlines into negative territory, and maintain firmly bearish slopes, reflecting persistent selling interest.

Support levels: 2,286.70 2,271.90 2,258.30

Resistance levels: 2,308.80 2,321.55 2,333.10 

Fed Leans Hawkish, Dollar Gains

The Federal Reserve’s decision to maintain the federal funds rate target range at 5.25%-5.50%, as anticipated by the market, wasn’t the main story. Instead, it was the accompanying policy statement and press conference by Chair Jerome Powell that dampened expectations for a swift easing of monetary policy. Policymakers prioritized combating inflation, despite recent data showing some easing in consumer prices. This hawkish tilt by the Fed strengthened the US dollar, making dollar-denominated silver more expensive for foreign investors and exerting downward pressure on prices.

Silver Waits for Rate Cut Clarity

The silver market, which typically thrives on expectations of lower interest rates, now faces uncertainty. While recent inflation data offered a positive sign, the delay in rate cuts throws a curveball at the bullish narrative. Lower borrowing costs tend to make non-interest-bearing assets like silver more attractive, but the timing of those cuts remains unclear. This lack of clarity from the Fed is likely to result in volatile silver prices in the near term.

Economic Data and Fed Guidance Key

Traders should pay close attention to upcoming economic data releases and the Fed’s pronouncements for clues on the central bank’s next move. Initial jobless claims data and the producer price index for May, both scheduled for release today, could offer insights into inflation pressures. Additionally, any indications from the Fed about the timing of the single rate cut it now forecasts for 2024 will be crucial for gauging silver’s future direction.

Choppy Trading Ahead for Silver

With the Fed adopting a wait-and-see approach, silver’s short-term outlook is uncertain. While the recent inflation slowdown may provide some support, the delay in rate cuts could limit any significant upward momentum. Investors should be prepared for choppy price action until the Fed offers a clearer timeline for its monetary policy changes.

Technical Analysis

• Gold price turns south toward $2,300 early Thursday, snapping a three-day rebound.  
• The US Dollar looks to extend post-US CPI data recovery, courtesy of the Fed’s hawkish hold.
• Gold sellers remain poised to test the key $2,277 support, as the daily RSI stays bearish.

Gold price is trading in the red for the first time this week, looking to retest the $2,300 level early Thursday. Gold sellers fight back control following the hawkish US Federal Reserve (Fed) interest rate decision but stay cautious ahead of the US Producer Price Index (PPI) inflation data due later on Thursday.

Gold price enjoyed a good two-way business on Fed day

Gold price enjoyed good two-way price action on Wednesday, starting off the day on a cautious footing, consolidating Tuesday’s rebound in the lead-up to the US Consumer Price Index (CPI) data release.

Gold buyers received a fresh boost on a much softer-than-expected US CPI report, which bolstered expectations of Fed interest rate cuts this year. Increased dovish Fed bets smashed the US Dollar alongside the US Treasury bond yields across the curve, driving Gold price closer to the $2,350 barrier.

The headline CPI was flat over the month in May, below expectations for a 0.1% gain. Core CPI rose 0.2%, also below estimates for a 0.3% increase. The annual figures also came in softer than the market consensus.

However, the tide turned against Gold price, as sellers jumped back into the game on the Fed policy announcements. Gold price reversed nearly $15 from multi-day highs to settle with modest gains near $2,325 on Wednesday.

Fed held policy rates steady in the range of 5.25%-5.50%, following the June policy meeting. The revised Summary of Economic Projections, the so-called dot-plot, indicated the policymakers expect to cut rates only once in 2024, against a projection of three rate cuts in the March forecasts and down from two rate cuts widely anticipated.

Fed Chair Jerome Powell also delivered hawkish comments during his post-policy meeting press conference, noting that “more recent readings on inflation have shown easing. So far this year, we have not got greater confidence on inflation in order to cut.”

“Will need to see more good data to bolster confidence on inflation,” Powell added.

With the ‘Super Wednesday’ now out of the way, attention turns toward a fresh batch of top-tier US economic data, including the PPI report, which could raise doubts over the Fed’s hawkish outlook on interest rates.

Gold price will likely remain at the mercy of risk trends and the US Dollar price action, in the aftermath of the key US events.

Gold price technical analysis: Daily chart

As observed on the daily chart, the Gold price defied bearish pressures on Wednesday but the downside bias remains intact going forward, as the 14-day Relative Strength Index (RSI) holds well below the 50 level and a Bear Cross remains in the making.

The 21-day Simple Moving Average (SMA) is on the verge of crossing the 50-day SMA from above, which if happens will validate the bearish crossover, opening the door for a renewed downtrend in Gold price.

The immediate support is now seen at the $2,300 threshold, below which the May 3 low of $2,277 will be threatened. A sustained break below the latter is critical to boosting sellers toward the $2,250 psychological barrier.

Alternatively, the recovery in Gold price will need acceptance above key confluence support-turned-resistance near $2,350, where the 21-day and 50-day SMAs coincide.

Gold buyers will then flex their muscles toward the May 24 high of $2,364 on their way to the June 7 high of $2,388.