- Gold recovers from recent losses, buoyed by market interest despite a stronger US Dollar and higher US Treasury yields.
- De-escalation of Middle East tensions contributed to increased market stability, denting the appetite for Gold buying.
- US Durable Goods Orders were solid, but expectations for Fed rate cuts shift to later in the year.
Gold rebounded on Wednesday after experiencing two consecutive negative sessions earlier in the week, with geopolitical risks subsiding. Despite strong economic data from the US, a robust US Dollar, and elevated US Treasury yields, buyers were enticed to purchase gold after the recent dip.
XAU/USD is trading at $2,327, showing a 0.28% increase. The easing of tensions in the Middle East following exchanges between Iran and Israel has contributed to this stabilization. Market expectations for Fed rate cuts in June and July have dwindled, with September 2024 being the anticipated time for the first rate reduction.
The latest report from the US Department of Commerce revealed a significant increase in Durable Goods Orders for March, surpassing estimates and February’s numbers. Core sales, however, fell short of projections but displayed improvement compared to the previous month.
Daily digest market movers: Gold trims its losses amid upbeat Durable Goods Orders report
- US Durable Goods Orders recorded a notable 2.6% month-over-month expansion in March, exceeding the previous 0.7% rise and surpassing expectations of 2.5%. Excluding transportation, Durable Goods Orders rose by 0.2%, an improvement over February’s 0.1% increase but below the projected 0.3%.
- Upcoming Q1 GDP data and core PCE inflation figures will provide further insights into the potential timing of Fed interest rate adjustments. Projections indicate stable core PCE Price Index at 0.3% and an anticipated decline in the annual core PCE rate to 2.6% from February’s 2.8%, indicating a potential softening of inflation.
- A softer-than-expected S&P Global PMI report in the US on Tuesday has increased the likelihood of a rate cut in July. The report suggested a loss of economic momentum at the beginning of the second quarter, signaling below-trend growth in April.
- Traders on the Chicago Board of Trade (CBOT) expect the fed funds rate to reach 4.98% by the end of 2024, slightly higher than the previous day’s projection.
- The US 10-year Treasury benchmark rate climbed by six basis points to 4.66%.
- The US Dollar Index (DXY) rose by 0.18% to 105.87.
Technical Analysis: Gold price stays firm near $2,320
In spite of forming a “bearish engulfing” chart pattern, Gold has seen a recovery and buyers are currently in control. To maintain upward momentum, XAU/USD needs to surpass the April 19 low of $2,373, potentially aiming for $2,400. Subsequent targets include Friday’s high of $2,417 and the all-time high of $2,431.
If XAU/USD prices drop below the April 15 daily low of $2,324, it could lead to a test of $2,300, with a breach opening the door to the March 21 high at $2,222.
Gold FAQs
Gold has been historically valued as a store of value and medium of exchange. It serves as a safe-haven asset during turbulent times and a hedge against inflation and depreciating currencies.
Central banks are major holders of Gold, using it to enhance perceived economic strength and currency stability, with emerging economies like China, India, and Turkey increasing their Gold reserves.
Gold exhibits an inverse correlation with the US Dollar and Treasuries, making it attractive during Dollar depreciation and market uncertainties.
Gold prices can be influenced by geopolitical instability, economic data, and currency movements, particularly related to the US Dollar.
- Gold recovers from recent losses, buoyed by market interest despite a stronger US Dollar and higher US Treasury yields.
- De-escalation of Middle East tensions contributed to increased market stability, denting the appetite for Gold buying.
- US Durable Goods Orders were solid, but expectations for Fed rate cuts shift to later in the year.
Gold rebounded on Wednesday after experiencing two consecutive negative sessions earlier in the week, with geopolitical risks subsiding. Despite strong economic data from the US, a robust US Dollar, and elevated US Treasury yields, buyers were enticed to purchase gold after the recent dip.
XAU/USD is trading at $2,327, showing a 0.28% increase. The easing of tensions in the Middle East following exchanges between Iran and Israel has contributed to this stabilization. Market expectations for Fed rate cuts in June and July have dwindled, with September 2024 being the anticipated time for the first rate reduction.
The latest report from the US Department of Commerce revealed a significant increase in Durable Goods Orders for March, surpassing estimates and February’s numbers. Core sales, however, fell short of projections but displayed improvement compared to the previous month.
Daily digest market movers: Gold trims its losses amid upbeat Durable Goods Orders report
- US Durable Goods Orders recorded a notable 2.6% month-over-month expansion in March, exceeding the previous 0.7% rise and surpassing expectations of 2.5%. Excluding transportation, Durable Goods Orders rose by 0.2%, an improvement over February’s 0.1% increase but below the projected 0.3%.
- Upcoming Q1 GDP data and core PCE inflation figures will provide further insights into the potential timing of Fed interest rate adjustments. Projections indicate stable core PCE Price Index at 0.3% and an anticipated decline in the annual core PCE rate to 2.6% from February’s 2.8%, indicating a potential softening of inflation.
- A softer-than-expected S&P Global PMI report in the US on Tuesday has increased the likelihood of a rate cut in July. The report suggested a loss of economic momentum at the beginning of the second quarter, signaling below-trend growth in April.
- Traders on the Chicago Board of Trade (CBOT) expect the fed funds rate to reach 4.98% by the end of 2024, slightly higher than the previous day’s projection.
- The US 10-year Treasury benchmark rate climbed by six basis points to 4.66%.
- The US Dollar Index (DXY) rose by 0.18% to 105.87.
Technical Analysis: Gold price stays firm near $2,320
In spite of forming a “bearish engulfing” chart pattern, Gold has seen a recovery and buyers are currently in control. To maintain upward momentum, XAU/USD needs to surpass the April 19 low of $2,373, potentially aiming for $2,400. Subsequent targets include Friday’s high of $2,417 and the all-time high of $2,431.
If XAU/USD prices drop below the April 15 daily low of $2,324, it could lead to a test of $2,300, with a breach opening the door to the March 21 high at $2,222.
Gold FAQs
Gold has been historically valued as a store of value and medium of exchange. It serves as a safe-haven asset during turbulent times and a hedge against inflation and depreciating currencies.
Central banks are major holders of Gold, using it to enhance perceived economic strength and currency stability, with emerging economies like China, India, and Turkey increasing their Gold reserves.
Gold exhibits an inverse correlation with the US Dollar and Treasuries, making it attractive during Dollar depreciation and market uncertainties.
Gold prices can be influenced by geopolitical instability, economic data, and currency movements, particularly related to the US Dollar.
