Opinions on a possible Fed key rate hike from the regulator's representatives strengthened the dollar's position, cooling down the momentum of the rise in precious metals prices.
BBH Global Currency Strategy provided a brief analysis of the US Federal Reserve's Beige Book, published on Wednesday. The report data pointed to a slight slowdown in economic activity in the country in recent weeks. Meanwhile, inflation remains at a high level.
A decline in consumer and business loan applications and a slowdown in employment growth in the US labor market were also noted. Consumer prices have risen moderately, supported by strong demand, rising inventories, and high labor costs. Nevertheless, the pace of price growth has slowed.
According to WIRP, the probability of a 25 basis point interest rate hike by the U.S. Fed in May is increasing. It is now estimated at about 90%, although earlier this week it was 80%, and last week it was 70%. However, the market expects only one hike to be delivered by the end of the year.
A pause in the US central bank's monetary policy tightening is forecast for June, but it will depend a lot on incoming economic data.
Expectations of an interest rate hike are already reflected on precious metals price charts. Growing worries have already been moderately negative for gold, silver and palladium. However, long-term demand for precious metals remains strong.
The U.S. manufacturing PMI will be released today at 13:45 GMT. If US PMI data is high enough, it could indicate an increase in demand for palladium in the auto industry, which tends to be the biggest consumer of the metal. This could support a rise in the price of palladium.
The palladium price continues to move in an uptrend of the H4 time frame.
The hourly time frame demonstrates a formation of a graphical pattern called a flag. The price is within the flag's body. The flagstaff is ascending, indicating new upside potential for the palladium price. Breaking through the downward resistance of the flag will strengthen the signal for growth.
Signal:
A short-term prospect for palladium suggests buying.
The target is at the level of 1700.00.
A Take profit could be placed near the level of 1645.00.
A Stop-loss is at the level of 1540.00.
The bullish trend is short-term, so trading volume should be no more than 2% of the balance.
This content is for informational purposes only and is not intended to be investing advice.
