Gold Price Forecast: XAU/USD extends recovery above $1,910 after US Core PCE

The US dollar weakened following consumer inflation data.
DXY drops 0.4%, retreating from two-week highs.
XAU/USD reached its highest level in three days.

Matías Salord FXStreet

Gold prices are having their best day in weeks on Friday, boosted by a decline in the US dollar across the board. XAU/USD jumped from near $1,905 to $1,920 following the release of the US Core Personal Consumption Expenditure Price Index.

The consumption inflation figures showed a decline slightly higher than expected and triggered a retreat in US yields and boosted equity and commodity prices. The US Core PCE fell in May to 4.6% on an annual basis from 4.7%, while the headline dropped from 4.6% to 3.8%.

These figures softened Federal Reserve rate hike expectations for the next meeting. The focus now turns to next week's US labor market data, which includes the ADP, Jobless Claims (Thursday), and the Nonfarm Payrolls report (Friday).

XAU/USD rebounding

XAU/USD is hovering around $1,915, up less than $10 but enough to make it the best day in weeks. The recovery took place after reaching a low on Thursday at $1,892, the lowest level in three months.

On the upside, XAU/USD is breaking a short-term downtrend line. The next resistance area is $1,920. On the downside, a decline below $1,905 would weaken the short-term outlook for the yellow metal.

Technical levels

XAU/USD

Overview
Today last price	1916.49
Today Daily Change	8.29
Today Daily Change %	0.43
Today daily open	1908.2

Trends
Daily SMA20	1940.32
Daily SMA50	1970.36
Daily SMA100	1943.91
Daily SMA200	1858.19

Levels
Previous Daily High	1913.17
Previous Daily Low	1893.01
Previous Weekly High	1958.85
Previous Weekly Low	1910.18
Previous Monthly High	2079.76
Previous Monthly Low	1932.12
Daily Fibonacci 38.2%	1905.47
Daily Fibonacci 61.8%	1900.71
Daily Pivot Point S1	1896.42
Daily Pivot Point S2	1884.63
Daily Pivot Point S3	1876.26
Daily Pivot Point R1	1916.58
Daily Pivot Point R2	1924.95
Daily Pivot Point R3	1936.74

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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