- Gold price is facing delicate hurdles around $1,945.00 despite the USD Index has retreated from 104.20.
- A downgrade in the US long-term credibility would have a negative impact on the USD Index and US equities.
- Gold price is defending its cushion near horizontal support plotted from $1.937.39.
Gold price (XAU/USD) is facing fragile barricades around $1,945.00 in the Asian session. The precious metal is expected to move higher as the US Dollar Index (DXY) has retreated after a pullback move to near 104.20. The approval of a raise in the US debt-ceiling has pushed the USD index under pressure.
There is no denying the fact that the United States economy will attract a downgrade in its long-term credibility by credit rating agencies as higher debt increases the default chances of a nation. This would have a negative impact on the US Dollar Index and US equities, however, Gold would be considered a safe-haven. Therefore, the upside bias for the Gold price looks extremely solid.
S&P500 futures have surrendered the majority of gains added in early Asia. Investors should note that US markets are closed on Monday on account of Memorial Day, therefore, investors could remain risk-averse ahead.
Meanwhile, fears of more interest rate hikes by the Federal Reserve (Fed) could put some pressure on the Gold price. Rising consumer spending is advocating persistence in the US inflation, which could force the Fed not to halt its policy-tightening spell. This week, the US Employment data will keep investors’ busy as it will provide a base for June’s monetary policy meeting.
Gold technical analysis
Gold price is defending its cushion near horizontal support plotted from March 15 high at $1.937.39 on a four-hour scale. The precious metal is auctioning in a Falling Channel in which each pullback is considered a selling opportunity by market participants.
The 20-period Exponential Moving Average (EMA) at $1,952.38 is consistently barricading the Gold bulls from making any recovery.
Meanwhile, the Relative Strength Index (RSI) (14) is looking to shift its oscillation in the 40.00-60.00 range from the bearish range of 20.00-40.00, which indicates that the downside momentum has faded.
Gold four-hour chart
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
Will US Dollar regain its strength after April inflation data – LIVE
Annual inflation in the US, as measured by the change in the Consumer Price Index (CPI), is forecast to edge lower to 3.4% in September. Investors will scrutinize the inflation report to try to figure out whether the Federal Reserve will opt for a policy pivot in Q3.
EUR/USD holds above 1.0800 ahead of US inflation data
EUR/USD stays in positive territory above 1.0800 after registering its highest daily close in over a month on Tuesday. The data from the Eurozone showed that the GDP grew at an annual rate of 0.4% in Q1. Focus shifts to April inflation report from the US.
GBP/USD advances above 1.2600, all eyes on US CPI data
GBP/USD preserves its bullish momentum and trades at its highest level in nearly two weeks above 1.2600 in the European session on Wednesday. The US Dollar struggles to find demand and allows the pair to stretch higher ahead of April CPI and Retail Sales data from the US.
Gold climbs above $2,370 as US yields edge lower ahead of inflation data
Gold extends its uptrend and trades above $2,370 in the European session on Wednesday after gaining nearly 1% on Tuesday. The benchmark 10-year US Treasury bond yield stays in the red below 4.5% ahead of US inflation data, helping XAU/USD keep its footing.
Ripple’s discounts for institutional clients stir debate among attorneys discussing SEC lawsuit
Ripple price consolidates in a tight range around $0.50 on Wednesday as the Securities and Exchange Commission (SEC) legal battle against payment-remittance firm Ripple intensifies with two key issues in focus this week.