US Treasury bond yields began to fall. Meanwhile, investors await high-level US economic data. The gold price is attempting a fresh rise towards a two-week high of $2,041 reached on Friday.
Gold buyers are trying their luck as US data approaches
Traders are eagerly awaiting a new batch of high-impact US economic data, including Durable Goods Orders and Consumer Confidence, for a new signal on the timing of the Federal Reserve’s (Fed) policy change. Amidst this wait, a sense of caution prevails in the gold market. cryptokoin.comAs you follow from , gold prices have been trading in a narrow range for a while.
Markets are currently pricing the probability of the Fed not cutting interest rates at its May meeting as approximately 80%. The probability that the Fed will start reducing interest rates in June has decreased from 70% last week to 60%. Meanwhile, hawkish comments continue to come from Fed policymakers. This continues to defy interest rate cut expectations. Thus, it helps US Treasury yields find a floor.
Fed maintains its hawkish stance, market data awaits!
On Friday, New York Fed President John Williams said that “interest rate cuts could be made later this year, but only if appropriate.” Meanwhile, Fed President Christopher Waller stated that there should be no rush to start reducing interest rates. Earlier Tuesday, Kansas City Fed President Jeffrey Schmid, a new hawk, noted that “there is no need to pre-adjust the policy stance.” Schmid said, “The Fed needs to be patient. “It must wait for convincing evidence that the fight against inflation is being won,” he added.
However, the US Dollar is not getting any inspiration ahead of Thursday’s important inflation data release. Therefore, traders are likely to avoid placing new bets on the US Dollar before macro news arrives. Therefore, gold price is looking to extend the recovery before the $2,025 support.
Gold price technical analysis: In this case, a ‘Bullish Cross’ is formed!
Market analyst Dhwani Mehta evaluates the technical outlook for gold as follows. As we see on the four-hour chart, gold price is breaking out of a pennant formation to the upside and testing the bearish trend line resistance at $2,034. The four-hour candlestick must move above this level on a closing basis to confirm that the uptrend has been broken. The 50-Simple Moving Average (SMA) is looking to cross the 100-SMA to the upside. If this occurs, it will confirm a ‘Taurus Cross’.
Meanwhile, the Relative Strength Index (RSI) is pointing north above the middle line. Potential bullish indicators include a two-week high at $2,041. This level is the next upside target for the gold price for now. Further upside, the psychological barrier of $2,050 will challenge bearish commitments.
On the other hand, gold price, which failed to hold out above the aforementioned trendline resistance at $2,034, could see a fresh decline towards the immediate demand area around $2,028, where the 21-, 200-SMAs and ascending trendline support converge. A breach of the latter would trigger a fresh decline towards $2,021, the intersection of the 50- and 100-SMAs. The line in the sand for gold buyers is Friday’s low of $2,016.
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