Gold extends the pullback after the mixed NFP, but the focus remains on the CPI report

Gold recovered some losses in the final part of last week following the slightly dovish repricing triggered by the mixed NFP report. What’s next?

FUNDAMENTAL OVERVIEW
Gold extended the pullback in the final part of last week following the US NFP report. The data wasn’t bad, but it was enough to trigger a slightly dovish repricing in interest rate expectations. The chances for a July hike are now standing at just 24%, while the probabilities for a move in September dropped to 55%.

As mentioned previously, given the Fed’s focus on inflation, the US CPI will likely be more important. For now, Gold will likely remain rangebound at a higher level until we get to the main event.

This week, we don’t have much on the agenda. We have Fed’s Waller speaking today, but unless he explicitly endorses rate hikes, the price action should remain rangebound. The other potential catalyst could be the FOMC meeting minutes on Wednesday.

This is almost never a market moving report, but given the limited forward guidance from Fed Chair Warsh, traders will want to see if there’s any further signal in the minutes on the next policy move.