- Gold falls but is still above $1840.
- Return above $1850 would ease downside pressure.
- Operators waiting for the US inflation data.
Gold is falling on Friday and is trading near $1840, at a relevant support level that if it finishes giving way could lead to more losses. US inflation data may be key to the next direction.
losing shine
Despite falling for the second day in a row, XAU/USD remains in a short-term uptrend line and above Tuesday’s low. Risks appear skewed to the downside and a firm break below $1840 could enable a drop to $1830 and last week’s lows of $1828. Below the next strong support is seen at $1815.
Downside risks are expected to be alleviated by a rally above $1850. If confirmed above, the yellow metal could go looking for $1860. Above, the next strong resistance at $1870 will be exposed.
The chart and indicators favor short-term declines in gold, but at 12:30 GMT the US inflation data for May will be published, which will be key and could have a significant impact on the market, including gold through Treasury bond yields.
Negative stock market sentiment is having a mixed influence on the yellow metal. On the one hand, the strength of the dollar exerts negative pressure. At the same time, rising demand for safe-haven assets limits the rise (or drives a fall) in Treasury yields, lower yields favor gold.
Technical levels
Source: Fx Street
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