Gold has risen sharply beyond $1,980.00 ahead of US debt-ceiling discussions.
In the Asian session, the gold price moved comfortably over the important barrier level of $1,980.00. The precious metal has gained tremendous power. As the White House and Republicans struggle to reach an agreement on the US debt ceiling. Furthermore, the Federal Reserve’s (Fed) contemplation of a stable interest rate strategy is boosting bullish sentiment in gold.
To save the economy from default, US Biden may have to invoke his 14th amendment privilege.
The majority of the losses in early Asia have been recovered by S&P500 futures. However, the overall market sentiment is cautious. Since no agreement between US President Joe Biden and House Speaker Kevin McCarthy would force the former into a corner. To save the economy from default. US Biden may have to invoke his 14th amendment privilege.
Furthermore the US Dollar Index (DXY) has been updated. Its day’s low was 102.96 as the Fed is projected to maintain its interest rate policy. Despite the fact that restrictive credit conditions by US regional banks are effectively weighing on inflation.
Moreover Powell, the Fed’s chairman, stated on Friday that the current financial crisis. Which resulted in stricter lending rules, has reduced the need to raise interest rates. He went on to say. “Our policy rate may not have needed to rise as much as it would have otherwise.”
The preliminary S&P US PMI (May) will be in the focus in the coming months. Manufacturing PMI fell to 50.0 from 50.4 in the previous release. The Services PMI is projected to stay unchanged at 53.6 points.
Gold Technical Outlook
The gold price has risen over the potential barrier, which has now turned into support. On a four-hour scale, from the low of April 19 at $1,969.26.
The precious metal recovered in a V-shape from approximately $1,950.00. Due to the advent of responding purchasers.
However the short-term trend will turn positive if the price stays above the 20-period Exponential Moving Average (EMA) at $1,980.00.
The Relative Strength Index (RSI) (14) has quickly returned to the 40.00-60.00 region, indicating a bullish reversal.
