Gold is the most expensive in history. What will the week bring?

The key data we followed last week turned out to be worse than expected, which supported the bears in continuing the correction on the dollar index. The declines also affected the main Wall Street indices, where supply took control of the chart S & P 500 or Nasdaq-100. However, central banks and the situation on the precious metals market attract investors' attention. What's next for the gold price?

The ECB follows the path of the Fed

Last week we also followed the meeting of the European Central Bank. This was by no means a key event for the markets, as investors were already accustomed to the ECB and Christine Lagarde following the path set by the Fed. On Thursday, in addition to the decision to leave interest rates at the current level, we also received updated inflation projections for 2024 and 2025. The continued negative impact of energy prices on the level of inflation should significantly reduce the dynamics of price growth in the euro area, and the ECB will not wait with reductions until inflation reaches the level of 2%. The market - although it sees as many as four interest rate cuts this year - does not believe in the imminent easing of the ECB, which will look towards the Fed.

The future actions of the Fed or the ECB may be crucial for gold market participants. The precious metal has reached its historic peaks in recent days - thanks to, among others, weakness of the US dollar. The upcoming Fed interest rate cuts and Bank of Japan interest rate increases threaten the largest carry trade market, the USDJPY pair. So far, the correlation between the Fed's interest rate cuts and the gold price has been quite clear - the greater the chances of cuts, the greater the likelihood of an increase in gold prices. However, this situation changed in February. What's next for the gold price?

In today's webinar:

• ECB announces cuts?
• What's next with the price of gold?
• Will inflation surprise in the US?

About the host

Dr Przemysław Kwiecień - Chief economist X-Trade Brokers. Doctor of Economics at the University of Warsaw, graduate of the University of Warsaw and London Metropolitan University (MSc). Holder of the prestigious CFA certificate. He has been working for XTB since 2007, previously he gained experience as an advisor to the Minister of Finance, Mirosław Gronicki, and an economist at Bank Millennium. At XTB, he manages the Analysis Department.

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