GOLD Price Analysis – May 03, 2023

Daily Price Outlook

The price of Gold (XAU/USD) is currently fluctuating at its highest levels in two weeks, reaching around $2,052 during mid-trading hours today after experiencing its largest daily increase in a month.

This reflects the market's apprehensive outlook ahead of the release of major US data and the Federal Open Market Committee (FOMC) monetary policy meeting announcements.

Gold Price Holds Steady Amid Mixed US Data and Concerns Over Potential US Default

Gold's price surge, aided by a weak US dollar, has pushed the precious metal to new highs not seen in 13 trading days. With deteriorating job signs and the possibility of a US default, the US Dollar Index (DXY) has fallen to an intraday low near 101.54, down by -0.41 from the previous day.

Mixed US data, concerns about a potential US default, and banking instability have led to market caution, prompting Gold buyers.

The weakening of the US Gross Domestic Product (GDP) and mixed ISM PMI details have previously encouraged the US Dollar Index (DXY) bulls. However, this has benefited buyers of Gold due to indications of higher inflation and Federal Reserve hawks raising rates by 0.25%.

In addition, fears about the debt ceiling expiration, which was previously expected in July but is now anticipated in June, are weighing on market sentiment and may challenge XAU/USD bulls.

Elsewhere, the European Central Bank's Bank Lending Survey showed a drop in demand for credit from companies in the Eurozone, which could negatively impact credit conditions and indirectly challenge the hawkish Fed bias.

The Bank of Canada's hesitation to increase benchmark rates supports this view. Contrastingly, the Reserve Bank of Australia's unexpected rate hike, the Bank of England's high inflation rate, and the Swiss National Bank's efforts to control price pressure continues to keep rate hike concerns on the table and challenge the upside of the gold price.

Demand for Gold, largely driven by economic growth in Asia and the Pacific, has been on the rise recently, supported by upbeat forecast from the International Monetary Fund. The prospect of a Fed rate hike has bulls keeping an eye on Gold despite the possibility of short-term volatility.

Gold

GOLD – Technical Outlook

Gold prices have broken through the resistance line of the symmetrical triangle and closed above it, confirming a return to the main bullish trend. The price is expected to test the recent high of $2,048.70 with support from moving above the EMA50.

To continue the bullish trend, the price must remain above $1,992.20; otherwise, it may return to the correctional bearish trend and visit the $1,957.30 areas in the near term. The expected trading range for today is between support at $2,004.00 and resistance at $2,035.00.