- Gold price trades in positive territory for a consecutive day on Tuesday amid the softer USD.
- A downbeat US jobs data for April prompted speculation of potential rate cuts by the Fed in the coming months.
- Investors will keep an eye on Fed’s Kashkari’s speech later on Tuesday.
Gold price (XAU/USD) continues its upward movement on Tuesday, driven by the weaker US dollar (USD) following disappointing US Nonfarm Payrolls (NFP) data which has led to expectations of future interest rate cuts by the Federal Reserve (Fed). The anticipation of a possible easing cycle could push gold prices higher as it becomes a more affordable option for foreign buyers. Additionally, robust central bank purchases and demand from Asian markets are providing ongoing support for the precious metal in the short term.
The geopolitical tensions in the Middle East could further enhance safe-haven flows, benefiting the gold price. However, the upcoming speech by Fed Bank of Minneapolis President Neel Kashkari might influence the market, with a hawkish stance potentially strengthening the USD and dampening the appeal of USD-denominated gold.
Daily Digest Market Movers: Gold price remains strong amid inflationary environment and uncertainty
- Richmond Fed President Thomas Barkin highlighted that current interest rates should help cool the economy and bring down inflation to the Fed’s 2% target. He mentioned that strong job market conditions allow officials the time to gain confidence in falling inflation rates.
- New York Fed President John Williams hinted at future rate cuts, citing a moderation in job growth and the Fed’s comprehensive analysis of economic data.
- Markets have factored in potential rate cuts totaling 46 basis points (bps) by the end of 2024, with the first cut expected in September or November, according to LSEG’s rate probability app.
- Despite Hamas accepting a cease-fire plan, Israel rejected it due to unmet core demands, causing ongoing tensions in the region. Gold has surged approximately 12% this year despite inflation concerns and uncertainty surrounding future Fed rate cuts.
- US employment data for April showed slower-than-expected job growth and a decline in annual wage increases below 4.0% for the first time in almost three years.
Technical Analysis: Gold price seems poised to consolidate further in the near term
Gold price continues its positive trend, remaining above the crucial 100-day Exponential Moving Average (EMA) on the daily chart. In the short term, gold has been trading within a descending trend channel since mid-April. Despite this, the overall bias remains bullish as the 14-day Relative Strength Index (RSI) stays in the bullish zone around 58.0.
The immediate upside targets for gold lie at the $2,350–$2,355 range and the $2,400 psychological level, followed by the all-time high near $2,432. On the downside, initial support is seen at $2,300, with a key level at $2,275 signaling the lower boundary of the descending trend channel. Further downside targets include the April 1 low at $2,228 and the $2,200 mark.
US Dollar price this week
The table below displays the percentage changes of the US Dollar (USD) against major currencies this week, depicting the USD performance relative to its counterparts.
The heat map illustrates the percentage changes of major currencies against each other. The base currency from the left column and quote currency from the top row determine the displayed percentage change. For instance, selecting Euro and moving horizontally to Japanese Yen will show the percentage change for EUR/JPY.
- Gold price trades in positive territory for a consecutive day on Tuesday amid the softer USD.
- A downbeat US jobs data for April prompted speculation of potential rate cuts by the Fed in the coming months.
- Investors will keep an eye on Fed’s Kashkari’s speech later on Tuesday.
Gold price (XAU/USD) continues its upward movement on Tuesday, driven by the weaker US dollar (USD) following disappointing US Nonfarm Payrolls (NFP) data which has led to expectations of future interest rate cuts by the Federal Reserve (Fed). The anticipation of a possible easing cycle could push gold prices higher as it becomes a more affordable option for foreign buyers. Additionally, robust central bank purchases and demand from Asian markets are providing ongoing support for the precious metal in the short term.
The geopolitical tensions in the Middle East could further enhance safe-haven flows, benefiting the gold price. However, the upcoming speech by Fed Bank of Minneapolis President Neel Kashkari might influence the market, with a hawkish stance potentially strengthening the USD and dampening the appeal of USD-denominated gold.
Daily Digest Market Movers: Gold price remains strong amid inflationary environment and uncertainty
- Richmond Fed President Thomas Barkin highlighted that current interest rates should help cool the economy and bring down inflation to the Fed’s 2% target. He mentioned that strong job market conditions allow officials the time to gain confidence in falling inflation rates.
- New York Fed President John Williams hinted at future rate cuts, citing a moderation in job growth and the Fed’s comprehensive analysis of economic data.
- Markets have factored in potential rate cuts totaling 46 basis points (bps) by the end of 2024, with the first cut expected in September or November, according to LSEG’s rate probability app.
- Despite Hamas accepting a cease-fire plan, Israel rejected it due to unmet core demands, causing ongoing tensions in the region. Gold has surged approximately 12% this year despite inflation concerns and uncertainty surrounding future Fed rate cuts.
- US employment data for April showed slower-than-expected job growth and a decline in annual wage increases below 4.0% for the first time in almost three years.
Technical Analysis: Gold price seems poised to consolidate further in the near term
Gold price continues its positive trend, remaining above the crucial 100-day Exponential Moving Average (EMA) on the daily chart. In the short term, gold has been trading within a descending trend channel since mid-April. Despite this, the overall bias remains bullish as the 14-day Relative Strength Index (RSI) stays in the bullish zone around 58.0.
The immediate upside targets for gold lie at the $2,350–$2,355 range and the $2,400 psychological level, followed by the all-time high near $2,432. On the downside, initial support is seen at $2,300, with a key level at $2,275 signaling the lower boundary of the descending trend channel. Further downside targets include the April 1 low at $2,228 and the $2,200 mark.
US Dollar price this week
The table below displays the percentage changes of the US Dollar (USD) against major currencies this week, depicting the USD performance relative to its counterparts.
The heat map illustrates the percentage changes of major currencies against each other. The base currency from the left column and quote currency from the top row determine the displayed percentage change. For instance, selecting Euro and moving horizontally to Japanese Yen will show the percentage change for EUR/JPY.
