Gold price jumps to fresh YTD high; overbought RSI warrants caution for bulls.
The gold price (XAUUSD) rose for the fifth day in a row on Tuesday. Reaching a new three month high near $2,120 during the first part of the European session.
Bets of a June Fed rate drop keep the USD bulls on the defensive while also providing support.
Any further upward movement, however, appears tricky. As traders may choose to wait for more clues about the Federal Reserve’s (Fed) rate cut path. Consequently, the focus will stay fastened to Fed Chair Jerome Powell’s The two day congressional testimony begins on Wednesday. Aside from that, US macro data expected at the start of a new month. Such as the much watched monthly employment statistics, or the Nonfarm Payrolls (NFP) report on Friday, will influence the US Dollar (USD) and provide additional impetus to the metal.
A minor decrease in global risk sentiment provides a tailwind for the commodity.
Meanwhile, rising consensus that the Fed will begin decreasing interest rates in June keeps USD bulls on the defensive and supports the nonnyielding gold price. Meanwhile, lingering geopolitical tensions and fears about China’s slowdown dampen investors’ desire for risky assets. This is clear from a generally softer tone in the equities markets, which is viewed as another factor supporting the safe-haven XAUUSD. Traders now glance to the US ISM. Services PMI to capitalize on short-term opportunities. Nonetheless, the aforementioned fundamental backdrop indicates that the path of least resistance for the gold price is to the upside, and any corrective decline is more likely to be bought.
Daily Market movers: Gold price bulls may stop before of this week’s significant data/event threats.
Friday’s poor US macro data, combined with less hawkish statements from Federal Reserve officials, confirmed expectations on a June rate decrease and pushed the gold price beyond $2,100 on Monday.
Meanwhile, the US Dollar is on the defensive as expectations rise for an impending shift in the Fed’s policy stance, which, along with geopolitical worries, benefits the safe-haven metal.
Israel executed the largest counter-terrorism operation in years.
Ramallah, the Palestinian administrative capital, poses a potential of further escalation in Middle Eastern hostilities.
Bets of a June Fed rate drop keep the USD bulls on the defensive while also providing support.
Investors are looking to Fed Chair Jerome Powell’s two day testimony. For fresh indications on the course of interest rates. And critical US macro data to determine the next leg of the XAUUSD directional move.
A pretty busy week begins with the release of the US ISM Services PMI later. This Tuesday, but the spotlight will stay on the much watched US Nonfarm Payrolls (NFP) report on Friday.
On Tuesday, China’s Premier Li Qiang presented the opening remarks at the National People’s Congress (NPC) annual meeting stating. That the economic recovery is still in its early stages.
Reuters previously reported, citing an official work. The report states that China will aim 5% GDP growth in 2024. But it does not enhance investor confidence or provide any momentum to the XAUUSD.
