- Gold aims to end the week with decent gains of 0.37%.
- US core PCE falls 5.1% year-on-year, although still at 40-year highs; will the Fed pause?
- Gold Price Analysis (XAU/USD): If gold bulls reclaim $1,870, a push towards $1,900 is anticipated.
Gold (XAU/USD) rises during the American session, but still unable to challenge the weekly highs and remains glued to the 20-day moving average (DMA) near the $1,848.48 area. At the time of writing, XAU/USD is trading at $1,852.28 a troy ounce.
US core PCE matched expectations but was lower than March’s reading
European and US stocks continued to rise amid an upbeat market environment. The US Commerce Department released Core Personal Consumption Expenditure (PCE), the Fed’s favorite inflation reading. The numbers were better than expected, showing prices remain elevated, having risen 4.9%. in May (annualized), but below the rate of 5.1% registered in April.
Now that inflation appears to be slowing from forty-year highs, will the Fed tighten conditions at a slower pace? Meanwhile, the Fed’s May Minutes showed that all of its members agreed to raise rates by 50 basis points at each of two consecutive policy meetings.
Meanwhile, the US Dollar Index, which measures the value of the dollar against its peers, trimmed some early losses and gained 0.07% to settle at 101,827. Failure to break above 102,500 would open the door for a retest of the April 24 low at 99,818.
Contrary to the dollar’s gains, US Treasury yields showed that investors are ceasing to overvalue expectations of US central bank rate hikes. The 10-year is almost flat on the day, posting minimal losses, dipping to 2,743%, a tailwind for the underperforming metal, which benefits from lower yields.
On the other hand, the US economic calendar revealed additional data. Consumer spending rose 0.9% last month and beat estimates as consumers boosted purchases of goods and services, a sign that could underpin US economic growth in the second quarter, amid growing concern about a recession.
Gold Price Analysis (XAU/USD): Technical Outlook
In Friday’s price action, gold has recaptured the 20-day moving average (DMA) at $1,848.42, trading above $1,850. It is noteworthy that the XAU/USD bears were unable to push the price below the 200-day DMA, which indicates that the selling pressure might be easing, as the oscillators are showing. The Relative Strength Index (RSI) at 45.56 starts to head higher. Although it remains in bearish territory, an upward slope keeps gold bulls hoping to lift prices towards $1,900.
That said, the first resistance for XAU/USD would be $1,869.61. A break above would send spot towards the confluence of the upper Bollinger Band and the March lows around the $1,889.91-$1,891.08 area. Once surpassed, the next stop would be at $1,900.
|Last Price Today||1853.64|
|Today’s Daily Change||2.86|
|Today’s Daily Change %||0.15|
|Today’s Daily Opening||1850.78|
|20 Daily SMA||1850.88|
|50 Daily SMA||1902.48|
|100 Daily SMA||1886.24|
|200 Daily SMA||1839.52|
|Previous Daily High||1854.41|
|Previous Daily Minimum||1841.01|
|Previous Maximum Weekly||1849.45|
|Previous Weekly Minimum||1786.94|
|Monthly Prior Maximum||1998.43|
|Previous Monthly Minimum||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|
Source: Fx Street