Daily Price Outlook
XAU/USD is trading at 2,000.45, up by 0.56% in 24 hours. Gold prices rose ahead of US GDP and inflation statistics due to the significant safe haven demand, which held the yellow metal near crucial levels. However, as traders prepared themselves for much-anticipated statistics on US economic growth and the Federal Reserve's preferred inflation indicator, gold prices stayed within a narrow range.
High Demand for Safe-haven Gold
After the shares of the suffering bank, First Republic Bank (FRB), fell another 20% on Wednesday, following a 50% decline the day before, market sentiments faded amid growing concerns from the FRB. It puts the FRB at risk of violating the limitations on its Fed borrowing, which in turn causes a market-wide impact.
Furthermore, a dismal UPS forecast caused the major Wall Street averages to close lower as market concerns about the US economic downturn.
The yellow metal has gained favor as a safe haven due to weak regional bank earnings and recession worries. As a result, XAU/USD gained value as the demand for safe-haven increased.
Upcoming US Economic Data
On Wednesday, US Durable Goods Orders increased by 3.2% in March, beating the 0.8% forecast and the 1.2% decline in February. Moreover, the Consumer Confidence Index for April from the US Conference Board fell slightly from 104.0 to 101.3.
The US Dollar Index (DXY) fluctuated after the data came out. DXY is trading at 101.36, its lowest point in two weeks. Furthermore, the 10-year bond yield of the US Treasury is 3.45%. The weak dollar helped XAU/USD.
The US first-quarter GDP report, due later today, is now the main topic of attention. It is predicted that growth slowed following a fourth quarter that was higher than anticipated.
The personal consumption expenditures price index, the Fed's preferred inflation indicator, is coming on Friday and is predicted to show that inflation stayed stable in March compared to the previous month.
The data comes before the Fed meeting that will take place the following week. Fed is expected to raise interest rates by 25 basis points at the next meeting on 03 May.
As traders got ready for much-awaited updates on US economic data, XAU/USD remained in a constrained range.
Daily Technical Levels
Pivot Point: 1994
GOLD – Technical Outlook
Currently, gold's performance is consistent with our previous forecast, as it has recovered from the support level of $1,985, which was reinforced by an upward trend line. The price of gold is presently encountering significant resistance at the psychological level of $2,000, which is strengthened by a triple-top pattern.
The 50-day exponential moving average has been crossed by gold, as observed on the 2-hour time frame. Additionally, other technical indicators such as RSI and MACD indicate a potential upcoming surge.
Given these factors, the recommended strategy is to monitor the $2,000 resistance level for a potential breakout, which could propel the price of gold toward the next resistance level of $2,009.
If a successful breakout occurs at this level, it may trigger further price increases for gold, potentially reaching the $2,019 mark.
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