Gold Reclaims $2,000 Ahead of U.S. Inflation Data
2023.04.11 14:59
prices resumed the advance on Tuesday after a limited downward correction prompted by the dollar’s spike that followed the encouraging report.
At the time of writing, the spot price is trading at $2,005 an ounce, up 0.71% on the day. At the same time, the is trading at 0.3% below its opening price at 102.25.
The greenback has weakened across the board despite higher U.S. Treasury yields. The note rate is at 3.45%, accumulating three days of gains amid speculation the Federal Reserve might raise rates by 25 bps once again in May, taking the Fed funds range to 5%-5.25% before pausing its tightening cycle.
On Friday, an in-line-with-expectations employment report fueled expectations of a 25 bps hike. On Wednesday, the U.S. will publish March (CPI) data, which will be closely scrutinized by investors, especially after Federal Reserve Bank of New York President John Williams said on Tuesday that they need to stay in “data-dependent mode,” and added that if inflation comes down, they will have to lower interest rates.
From a technical perspective, the XAU/USD pair holds a positive short-term outlook. However, the daily chart exhibits dwindling bullish momentum following the $2,030 – $1,980 downward correction over the last few days.
A break above last week’s high of $2,032 could pave the way to a retest of records highs in the $2,070 area. On the other hand, the $1,970 zone stands as critical short-term support, containing the 78.6% retracement of the $2,070 – $1,615 downtrend and the 20-day simple moving average.
