Gold is testing $2,000 near a 61.8% Fibonacci retracement.
The gold price remains in the key Asian support area, with bulls probing the bearish commitments at the psychological $2,000 level. So far, XAUUSD has risen from a low of $1,993.41 to a high of $1,999.41.
The theme driving the markets on a low calendar week remains the Federal Reserve and questions about whether the central bank is about to pause or not. The US Dollar was boosted on Friday by hawkish remarks from Federal Reserve Governor Christopher Waller.
Despite a year of aggressive rate increases, the Fed “hasn’t made much progress” in returning inflation to their 2% target. According to the top central banker, and rates still need to rise.
A few positive components in the latest US Retail Sales, and consumer spending for the previous quarter was also strong. The April survey of business activity in New York State also showed an increase for the first time in five months. “In the month, new orders increased by a record 46.8 points to 25.1, a one-year high. The shipments index increased by more than 37 points. Prices received increased by 0.8 point to 23.7 points, indicating mild inflationary pressure. “Both delivery times and the average workweek have increased,” ANZ Bank analysts explained.
The combination of hawkish rhetoric and recent data is making gold less appealing to foreign buyers. While benchmark Treasury yields have risen to a more than two-week high. Fed funds futures indicate that the market believes the Fed will Starting rates later this year have been pushed back from September to November. With a smaller cut also expected.
Markets are looking for new Federal Reserve rate hike cues for a new directional trade.
Investors will be watching for US flash PMIs for April. And any additional comments from Fed officials before they enter a blackout period beginning April 22. Ahead of the Fed’s May 2-3 meeting. According to TD Securities analysts. The S&P PMIs for early April will provide the first comprehensive look at the state of the US economy following the banking turmoil.
Note that the March data was not clearly impacted by banking jitters. But perhaps it was too soon to be reflected: both the manufacturing and services PMIs registered their third consecutive increase at the time. With the latter expanding further.
