Investors eagerly awaited the release of U.S. non-farm payroll data and the minutes from the latest Federal Reserve meeting later in the week. Gold price recession appeared at 0.4% to reach $1,911.70 per ounce, while U.S. gold futures dropped 0.51% to $1,919.40.
Gold Maintains Resilience Above $1,900 Mark Despite Rate Hike Outlook
During the April-June quarter, bullion experienced a loss of 2.5%. Carlo Alberto De Casa, an external analyst at Kinesis Money, attributed the slight decline in gold to the risk-on sentiment prevailing in the market. However, despite expectations of rate hikes, the precious metal managed to hold above the $1,900 mark. De Casa added that gold prices could potentially trade within the range of $1,900 to $1,930 until the release of the Federal Open Market Committee (FOMC) meeting minutes from June 13-14, as investors eagerly await further news.
The dollar index rose by 0.3%, making gold more expensive for holders of other currencies. Additionally, the benchmark 10-year U.S. Treasury yield, which had risen to its highest level since March, stood at 3.844% [MKTS/GLOB] [USD/].
US Consumer Spending and Inflation Concerns Influence Gold Market
Despite the lacklustre U.S. consumer spending in May, indicating some success in the Federal Reserve’s efforts to control inflation through rate hikes, the core PCE price index, the Fed’s preferred inflation gauge, recorded a year-on-year rise of 4.6% following a 4.7% increase in April. Han Tan, the chief market analyst at Exinity, emphasized that it is still premature to suggest that the Fed can consider rate cuts. If Friday’s U.S. jobs report proves resilient, it could push gold back into sub-$1,900 territory, given a persistently hawkish Fed stance.
When interest rates are elevated, investors tend to be discouraged from investing in gold, which does not generate yield. CME’s Fedwatch tool indicates an 89% probability of a 25 basis points U.S. rate hike occurring in July.
Among other valuable metals, spot silver remained stable at $22.7667 per ounce, while platinum saw a decrease of 0.6% to $895.61. Palladium also encountered a minor decline of 0.3% to $1,224.34.
The XAU/USD gold price corrects to approximately $1,910, according to the forecast.
In the London session, gold price (XAU/USD) underwent a corrective move, approaching $1,910.00. The precious metal faced pressure as the Federal Reserve’s consistent reaffirmation of more interest rate hikes heightened concerns about persistent inflation in the U.S. economy.
During the London session, S&P500 futures exhibited nominal gains, reflecting an improvement in market participants’ risk appetite. US equities were also heavily purchased on Friday ahead of the quarterly earnings season.
Technical Analysis: Sell Gold Bullion Seeks Support Near 61.8% Fibonacci Retracement
On a four-hour scale, amidst the gold price recession, it is currently seeking support near the 61.8% Fibonacci retracement level, plotted from the low of $1,804.76 on February 28 to the high of $2,079.76 on May 03, at $1,909.55. The 50-period Exponential Moving Average (EMA) at $1,920.00 is acting as a resistance for bullish movements. Furthermore, the downward-sloping trendline from the high of $2,079.76 on May 03 remains a barrier for the precious metal.
The Relative Strength Index (RSI) (14) indicates a bearish momentum, with values ranging between 20.00-60.00.
