• Sustained USD selling bias assisted gold to gain some positive traction on Friday.
  • Speculations that the Fed would pause the rate hike cycle and undermined the buck.
  • The risk-on impulse could cap gains for the metal ahead of the US PCE Price Index.

Gold built on the overnight bounce from the very important 200-day SMA support and edged higher on the last day of the week. The XAUUSD held on to its modest intraday gains through the early European session and was last seen trading near the top end of the daily range, just above the $1,850 level.

The US dollar prolonged its recent bearish trend and dropped to a fresh one-month low on Friday, which, in turn, benefitted the dollar-denominated gold. The FOMC meeting minutes released on Wednesday suggested that the Fed could pause the rate hike cycle after two 50 bps hikes each in June and July amid the worsening economic outlook. The speculations were further fueled by Thursday's release of the Prelim US GDP report, which showed that the world's largest economy contracted by a 1.5% annualized pace in the first quarter. This was seen as a key factor that exerted downward pressure on the buck.

Meanwhile, doubt over the Fed's ability to bring inflation under control without sinking the economy into recession continued dragging the US Treasury bond yields lower. In fact, the yield on the benchmark 10-year US government bond fell to a six-week low, which further undermined the greenback and offered additional support to the non-yielding gold. That said, a positive turnaround in the global risk sentiment - as depicted by a generally positive tone around the equity markets - could act as a headwind for the safe-haven precious metal. This might hold back bulls from placing aggressive bets.

Market participants now look forward to the release of the US Core PCE Price Index - the Fed's preferred inflation gauge - for some impetus later during the early North American session. This, along with the US bond yields will influence the USD price dynamics and provide some impetus to gold. Apart from this, traders will take cues from the broader market risk sentiment to grab short-term opportunities on the last day of the week.

Technical levels to watch

XAU/USD

Overview
Today last price 1853.68
Today Daily Change 2.90
Today Daily Change % 0.16
Today daily open 1850.78
 
Trends
Daily SMA20 1850.88
Daily SMA50 1902.48
Daily SMA100 1886.24
Daily SMA200 1839.52
 
Levels
Previous Daily High 1854.41
Previous Daily Low 1841.01
Previous Weekly High 1849.45
Previous Weekly Low 1786.94
Previous Monthly High 1998.43
Previous Monthly Low 1872.24
Daily Fibonacci 38.2% 1846.13
Daily Fibonacci 61.8% 1849.29
Daily Pivot Point S1 1843.06
Daily Pivot Point S2 1835.33
Daily Pivot Point S3 1829.66
Daily Pivot Point R1 1856.46
Daily Pivot Point R2 1862.13
Daily Pivot Point R3 1869.86

 

 

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.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD steadies near 1.0550, looks to post modest weekly gains

EUR/USD steadies near 1.0550, looks to post modest weekly gains

EUR/USD has lost its bullish momentum after having climbed above 1.0570 with the initial reaction to the US data in the American session and retreated toward the mid-1.0500s. On a weekly basis, the pair remains on track to close in positive territory. 

EUR/USD News

GBP/USD struggles to hold above 1.2300

GBP/USD struggles to hold above 1.2300

GBP/USD has edged lower following a jump above 1.2300 in the early American session on Friday. The market mood remains upbeat ahead of the weekend with Wall Street's main indexes posting strong daily gains on upbeat US data. 

GBP/USD News

Gold stays below $1,830 as US yields edge higher

Gold stays below $1,830 as US yields edge higher

Gold continues to fluctuate below $1,830 on Friday and looks to close the second straight week in negative territory. Fueled by the risk-positive market environment, the benchmark 10-year US Treasury bond yield is up more than 1% on the day, limiting XAU/USD's upside.

Gold News

Why Cardano could surprise over the weekend

Why Cardano could surprise over the weekend

ADA  set to close out the week with a gain on the workday trading week and over the weekend? Central banks signaled that the rate hike cycle is ending, meaning less stress and tight conditions for trading, opening up room for some upside potential with Cardano set to pop above $0.55 and test a significant cap.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Forex MAJORS

Cryptocurrencies

Signatures