Gold prices posted more than 0.70% gain yesterday. Precious metal sparked to the day’s high as the dollar retreated against its major peers.
Greenback gave up its previous day gain as the market is waiting on inflation data. And its impact on the Fed decision. US CPI and Fed meeting minutes are due to be released later today. Dollar index was last down 0.30% against a basket of currencies at 102.174. The euro rose 0.50% to $1.0910.
The inflation data is coming on the heels of the latest U.S. jobs report. Which pointed to persistent tightness in the labor market. Adding to bets for the Fed to hike rates again at their May 2-3 policy meeting. As risks to financial stability ease.
The Fed is to publish the minutes of its March meeting. The minutes will be scrutinized for clues about the appetite for further policy tightening. As well as officials’ views on the health of the financial system.
The Fed is seen as likely to hike rates by an additional 25 basis points at its May 2-3 meeting. Before pausing in June. Markets are also pricing for the Fed to cut rates by year end on an expected recession. Though Fed officials have stressed the need to keep rates high in order to bring down inflation.
However, recent turmoil in the banking sector has added to fears. That aggressive monetary tightening could not only tip the economy into recession but that it could trigger more bank failures.
Today both data and events will have a significant impact on bullion and dollar
Technical View
Gold prices stalled its recent falling stick and recovered 0.74% yesterday. On 5 April 2023, prices retreated from the high of 61181 and made a low of 59912.
Yesterday, prices recovered sharply from the day’s low 60170 and made a high 60599 before closing at 60505.
A rising three candlestick pattern was noted on the daily chart which is indicating bullish momentum in the near future.
Further, prices turned back from 23.6% Fibonacci Retracement which is creating a probability for upside momentum towards immediate resistance 38.2% and 50%.
Hence, it’s expected that a break above 60620 will open the door for target 61150-61300-61550. Stop loss will be 60355. Alternatively, on the downside crucial support is seen at 59750 and a break below only, Gold prices retrace towards 59200-58950.