- Gold prices extend the previous day’s bounce off $1,835 support confluence.
- Yields print four-day downtrend as mixed Fedspeak supersedes hot inflation.
- Absence of major headlines allows traders to consolidate recent losses.
- Gold Price Forecast: Sentiment continues to favor the greenback
Gold (XAU/USD) prices pick up bids to renew intraday high around $1,858, stretching the previous day’s recovery during Thursday’s Asian session. The metal’s latest run-up could be linked to the softer US Treasury yields, as well as downbeat US Dollar Index (DXY) performance as traders seem running out of fuel to cheer the hawkish Fed, despite firmer US inflation data.
That said, the US 10-year Treasury yields dropped 1.4 basis points (bps) to 2.92%, around a two-week low by the press time. In doing so, the benchmark bond coupons drop for the fourth consecutive day.
The yields failed to cheer higher-than-expected US inflation data as the Fedspeak turned out mixed of late. That said, the headline Consumer Price Index (CPI) rose to 8.3% YoY versus 8.1% expected and 8.5% prior. More importantly, the CPI ex Food & Energy, better known as Core CPI, crossed 6.0% forecasts with 6.2% annual figures, versus 6.5% previous readouts.
Following the data, Fedspeak turned out to be mixed as the previously hawkish Federal Reserve Bank of St. Louis James Bullard mentioned that he ''won't emphasize single inflation report too much but inflation is more persistent than many have thought.'' However, Cleveland Fed President and FOMC member Loretta Mester previously recalled the bears as she said, “They don't rule out a 75 basis points rate hike forever”.
Against this backdrop, the DXY prints mild losses and the US stock futures rise around 0.30% amid sluggish markets.
Looking forward, weekly prints of the US Jobless Claims and monthly Producer Price Index (PPI) will decorate today’s calendar and hence major attention will be given to the qualitative catalysts for clear directions. Considering the recent consolidation in the market moves, the gold prices are likely to benefit from the softer yields and the US dollar pullback.
Technical analysis
Gold prices remain on the front foot, justifying Thursday’s rebound from a convergence of the 200-DMA, ascending trend line from August 2021 and 61.8% Fibonacci retracement of August 2021 to March 2022 upside.
Also keeping buyers hopeful is the recently improving RSI (14) line and easing the bearish bias of the MACD signals.
As a result, gold buyers are likely heading towards a confluence of the 100-DMA and a downward sloping trend line from April 21, near $1,885.
However, any further upside past-$1,885 will need validation from March’s low near $1,890 before calling XAU/USD bulls to attack $1,900.
Alternatively, pullback remains elusive beyond the $1,835 support confluence, a break of which won’t hesitate to direct gold prices towards the yearly low near $1,780.
Gold: Daily chart
Trend: Further recovery expected
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
USD/JPY holds positive ground around 151.50 following Japanese CPI data
The USD/JPY pair holds positive ground for the second consecutive day near 151.45 on Friday during the early Asian trading hours. The cautious approach from the Bank of Japan to keep monetary conditions accommodative exerts some selling pressure on the Japanese Yen.
AUD/USD depreciates on risk aversion amid a stronger US Dollar
AUD/USD extends its losses for the second successive session on Friday. However, market activity is expected to be subdued due to light trading on Good Friday. Meanwhile, the US Dollar strengthens as recent data indicates annualized economic expansion in the United States, driven by consumer spending.
Gold price finishes Thursday’s session set to reach new all-time highs
Gold price rallied during the North American session on Thursday and hit a new all-time high of $2,225 in the mid-North American session. Precious metal prices are trending higher even though US Treasury yields are advancing, underpinning the Greenback.
Top 3 Price Prediction BTC, ETH, XRP: Retail watches from the sidelines with a bias for shorts
Bitcoin is showing strength as markets head into the Easter holidays. As it rises, altcoins are following suit, with Ethereum and Ripple posting almost similar gains. Meanwhile, there remains an unfilled CME Gap, with a lot of liquidity also resting above and below BTC price.
Bears have been standing before a steamroller so far this year
Despite a pushback on rate cuts from Christopher Waller, and what was supposed to be cautious trading sentiment ahead of critical US inflation data released later on Friday, the S&P 500 rose on Thursday, marking its best first-quarter performance in five years.