Gold prices may struggle in for the direction

Gold prices fell on Thursday but remained largely in a recent trading range as many signals from the Federal Reserve reiterated expectations for more US interest rate hikes.

Strong gains were pared this week as the dollar fell sharply from a three-month high. But further losses for the dollar now appeared to be limited, as Treasury yields remained close to recent peaks.

Gold prices are down modestly after US economic data shows the US economy is steady on strong employment figures. Business continues to expand despite a cooling from earlier heat, while minutes from the latest Federal Reserve (Fed) monetary policy meeting showed that policymakers are in no rush to cut interest rates.

The minutes of the Fed’s late-January meeting, released on Wednesday, showed that the bank was in no hurry to begin cutting interest rates early. This notion was echoed by a slew of Fed officials this week, who cited concerns over sticky inflation and persistent strength in the U.S. economy.

The comments saw traders largely wipe out expectations for rate cuts in March and May, while also ramping up expectations that the central bank will keep rates steady in June.

US Initial Jobless Claims for the week ending February 17 fell by 12,000 to 201,000, coming in under the anticipated 218,000 and the prior week’s figure of 213,000. This drop indicates a continued tightness in the labor market, which is generally interpreted as a potential factor that could drive inflation upward.

Business activity in the US moderated in February, as reported by S&P Global. Both the Services and Manufacturing Purchasing Managers Index (PMI) remained in the expansionary zone, indicating growth. However, the Services PMI recorded a figure of 51.3, falling short of both expectations and January’s results, while the Manufacturing PMI rose to 51.5, surpassing forecasts and the previous month’s 50.7. Consequently, the Composite Index, which aggregates the performance of both sectors, declined slightly from 52 to 51.4.

Technical Outlook

Gold price retreated from the day’s high of 62308 and made a low of 61951 before closing at 61977.00.

On the above chart, prices met the resistance of the biggest temporary at 62400.00. The formation of a long descending candlestick indicates selling pressure at the moment.

RSI 14 and its DMA of 9 give a negative sign. All the technical aspects mentioned above indicate a downward trend. However, prices should trade below 61,920 to continue the decline to 61,580-61,450.00.

This is due to the huge resistance at 62,400, above which prices may test 62,680-63,050

Commodity Samachar
Learn and Trade with Ease

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