Gold Price in Focus: Is it expected to turn neutral amid firm US dollar?

Gold Price in Focus: Is it expected to turn neutral amid firm US dollar?

The Gold price eased slightly from yesterday’s highs as US Treasury yields rose and supported the dollar. Prices rose sharply after a US inflation report supported a rise in gold prices on Wednesday, but Thursday’s data was mixed, which is likely to lead to gains ahead of the weekend.

The XAU/USD trades at $2,376, down by 0.38%. Wall Street continued to trade at or near record highs, denting appetite for safe-haven assets like Gold. MCX GOLD settled at 72980, down 0.17%.

US economic data continued to wight on Gold prices after the number of Americans filing for unemployment benefits rose above estimates but trailed the previous reading.

US Bureau of Labor Statistics (BLS) announced that Initial Jobless Claims rose above estimates of 220K and came at 222K for the week ending May 11, but they trailed the prior reading of 232K.

Other data showed that construction permits plunged, while Housing Starts increased in April compared to March but missed forecasts. US Housing Starts rose to 1.36 million in April, marking a 5.7% YoY increase. However, Building Permits, which are an indicator of future construction activity, declined by 3%, falling to a rate of 1.44 million.

Recently, the May Philadelphia Fed Manufacturing Index dropped from 15.5 to 4, below forecasts, while Industrial Production in April remained unchanged.

Richmond Fed President Thomas Barkin acknowledged that inflation is decreasing but emphasized that it will “take more time” to reach the Fed’s target. Cleveland Fed President Loretta Mester expressed approval of the latest CPI data, noting that the current monetary policy stance is appropriate as the Fed continues to assess forthcoming economic data.

Technical Outlook – Gold Price

Gold price retreated from an intraday high of 73268 and fell 0.17% to 72980 yesterday. Prices rose sharply on Wednesday from a low of 72234 to a high of 73145.00

In the above chart, the high wave candlestick shows indecision. Although the Momentum Oscillator Relative Strength Index is also currently not supporting an upward movement.

Therefore, prices may stabilize below the mass resistance of 73350.00 for some time and retreat to 72400-71980.00.

A move above 73350 will take prices to 73550-73800.

Happy Trading!

Commodity Samachar
Learn and Trade with Ease

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