Gold price (XAU/USD) gains some positive traction for the second successive day on Friday and climbs to the $2,350 level, or a multi-day peak during the first half of the European session. The US Dollar (USD) adds to the previous day's weaker US GDP-inspired losses and turns out be a key factor acting as a tailwind for the commodity. Any meaningful appreciating move for the precious metal, however, still seems elusive in the wake of hawkish Federal Resreve (Fed) expectations.
Data published by the US Commerce Department on Thursday revealed that underlying inflation rose more than expected in the first quarter. This reaffirmed market bets that the Fed will delay cutting interest rates, which keeps the US Treasury bond yields elevated and should act as a tailwind for the Greenback. Apart from this, a positive risk tone, which tends to undermine safe-haven assets, should cap the Gold price ahead of the US Personal Consumption Expenditures (PCE) Price Index.
From a technical perspective, the XAU/USD, so far, has been struggling to make it through the 100-period Simple Moving Average (SMA) on the daily chart. The said barrier is currently pegged near the $2,345 region and should now act as a key pivotal point amid mixed oscillators on the daily chart. Meanwhile, a sustained strength beyond will be seen as a fresh trigger for bullish traders and lift the Gold price to the next relevant hurdle near the $2,371-2,372 region. The subsequent move up could extend further towards the $2,400 round figure en route to the all-time peak, around the $2,431-2,432 area touched earlier this month.
On the flip side, bearish traders are likely to wait for some follow-through selling and acceptance below the $2,300 mark before placing fresh bets. The Gold price might then extend the corrective decline further towards the $2,260-2,255 intermediate support before eventually dropping to the $2,225 area and the $2,200-2,190 region, representing the 50-day Simple Moving Average (SMA).
The Personal Consumption Expenditures (PCE), released by the US Bureau of Economic Analysis on a monthly basis, measures the changes in the prices of goods and services purchased by consumers in the United States (US). The YoY reading compares prices in the reference month to a year earlier. Price changes may cause consumers to switch from buying one good to another and the PCE Deflator can account for such substitutions. This makes it the preferred measure of inflation for the Federal Reserve. Generally, a high reading is bullish for the US Dollar (USD), while a low reading is bearish.
Read more.Next release: Fri Apr 26, 2024 12:30
Frequency: Monthly
Consensus: 2.6%
Previous: 2.5%
Source: US Bureau of Economic Analysis
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