U.S. Retail Sales Ahead!
Gold prices are trading slightly bullish at 1,834, having bounced off over the support area of 1,812 level. During the early European session, the precious metal gold remains under pressure amid the stronger U.S. dollar. The stronger greenback makes precious metals more costly for foreign investors, although a pullback in the U.S. Treasury yields restricted losses for the safe-haven metal.
The U.S. dollar and yields mounted on the back of stronger-than-expected inflation figures released on Wednesday. At the same time, the dollar gains more bullish momentum on the back of stronger than expected jobless claims data. During the week ending May 8, the advance numbers for seasonally adjusted jobless claims was 473K, a drop of 34k from the previous week’s improved level. This released data was the lowest level for initial unemployment claims since March 14, 2020, as the figures were 256K.
The jobless claims figure for the previous week was improved by 9K from 498K to 507K. This week, the U.S. Department of Labor reported jobless claims of 473K vs. 487K forecast while the figure was 507K during the previous week. Improved economic data helped the U.S. dollar gain bullish momentum and pressured the precious metal gold. The safe-haven appeal triggered the fears of war between Israel and Gaza. Israel military and Palestinian militants in the Gaza strip exchanged fires and escalated the fears of full-scale war. Israel carried out hundreds of airstrikes on Gaza, destroyed three tower blocks, and killed senior Hamas officials. In response to this, Palestinian militants fired more than 1000 rockets into Israel. The UN feared that the rising tensions between countries might start a full-scale war, which raised the need for a safe-haven appeal and supported gold prices.
During the U.S. session, the Census Bureau will be releasing the Retail Sales data for the U.S. economy. Economists are expecting a sharp dip in retail sales from 9.8% to 1.0%, while core retail sales are expected to drop from 8.4% to 0.5%.
Gold Intraday Technical Level
Pivot Point: 1832.22
Gold – XAU/USD – Technical Outlook
Gold is trading bullish at 1,833, having bounced off the support area of 1,814 level. Gold has reentered a trading range of 1,846 – 1,820. On the daily timeframe, gold is soaring towards the triple top resistance level of 1,844 level. The violation of this opens up additional room for buying until the next resistance area of 1,856 and 1,870. On the 4 hour timeframe, gold has crossed above 20 periods EMA at 1,829 level and 50 periods EMA at 1,814 level. Both of these EMA are support gold prices and are demonstrating odds of bullish trend continued until resistance area of 1,844. Later today, the focus will stay on the U.S. retail sales data as it can drive further price action in gold prices. All the best!