Gold Price Forecast: XAU/USD’s fate hinges on US consumer data, technicals favor bulls

Gold (XAU/USD) fell to fresh weekly lows of $1809 in the first half of Thursday’s trading, as the US dollar extended the post-US inflation surge. However, the gold price rebounded sharply to test the $1830 level after the greenback retreated on upbeat US data, which boosted the overall market mood. A fresh set of US data showed that fewer Americans filed for initial jobless claims last week while producer prices accelerated in April. Despite the encouraging US fundamentals and rising price pressures, the Fed policymakers continue to downplay mounting inflation concerns, which aided the rebound in the global stocks while weighing on the US Treasury yields across the curve.

Gold prices are looking to extend Thursday’s rebound ahead of the key US Retail Sales and Michigan Preliminary Consumer Sentiment data. The US Retail Sales are likely to rise by 1% MoM in April when compared to a massive 9.7% increase reported in March. If the data bets estimates, the US dollar is likely to see a fresh leg higher amid the ongoing influence of inflation dynamics on the markets. Gold could bear the brunt of fresh dollar’s advance. Meanwhile, disappointing US data could temper the Fed’s tightening calls, boding well for the gold optimists.

Gold Price Chart - Technical outlook

Gold: Daily chart

Gold continues to range between the 200 and 100-daily moving average (DMA) for the sixth trading session this Friday.

Thursday’s rebound in gold prices has confirmed a bullish crossover on the daily sticks, especially after the upward-sloping 21-DMA cut the mildly bearish 100-DMA from below.

Meanwhile, the 14-day Relative Strength Index (RSI) has turned, although holds comfortably above the midline, suggesting that the bullish potential remains well in place.

Therefore, the price of gold could advance towards the 200-DMA at $1847 if the buying interest picks up pace.

Ahead of that the $1840 level needs to be scaled on a sustained basis.

Alternatively, the confluence of the 21 and 100-DMAs at $1795 could emerge as a strong support if Thursday’s low caves into any downside pressure.