The gold price is attempting to remain confidently above $1,980.00 despite the volatile USD Index.
In the early European session, the gold price is aiming to trade over $1,980.00. The precious metal has received new life as the USD Index is projected to stay negative. In the absence of recovery indications.
Market mood is upbeat following the passage of the US debt-ceiling bill in Congress.
S&P500 futures have registered strong gains in Asia. As market mood is relatively upbeat following the passage of the US debt-ceiling measure in Congress and a decrease in anticipation of one more. The Federal Reserve (Fed) raised interest rates.
The US Dollar Index has retested its weekly low of 103.45. As Fed officials favor a pause in June’s monetary policy meeting. Citing the fact that domestic industrial activity in the United States has been persistently shrinking.
Furthermore the only thing that can preserve the USD index from further decline is the release of US Nonfarm Payrolls (NFP) data. Commerzbank economists believe that if the US labor market data for May is robust and beyond forecasts. The Dollar would strengthen.
Moreover they also stated that, given the rather consistent downward trend in employment growth. They predict 200K new positions to be generated in May, up from 253K in April. This is likely to keep the unemployment rate at 3.4%. The obvious deterioration of as a result. The labor market envisaged by the US Federal Reserve, which may curb inflation, would not be realized.
Technical analysis of gold
On a two-hour timeframe, gold price has broken through the downward-sloping trendline drawn from an all-time high of $2,079.76. The precious metal is gaining momentum. In preparation for a break over the horizontal resistance line drawn from the high on May 19 at $1,984.25.
Moreover the price of gold has risen above the 200-period Exponential Moving Average (EMA). At $1,973.58, indicating that the long-term trend has become positive.
However the Relative Strength Index (RSI) (14) has moved into the positive region of 60.00-80.00. Indicating that the uptrend is still alive.
