On Monday, the gold price is trying a moderate comeback to start the week, interrupting a three-day downturn. USD has slowed its upward pace as bulls take a breather after achieving weekly highs on Friday.
US Dollar consolidates previous week’s gains.
The US Dollar is holding recent gains, battling for a new upswing in the face of slow performance. In US Treasury bond rates so far this Monday. The US dollar continued its rebound climb on Friday, aided by a drop in US Consumer Sentiment data. Which fueled fears about an economic slowdown amid a lengthy standoff over the US government’s debt ceiling.
Furthermore The University of Michigan (UoM) Preliminary Consumer Sentiment Index fell to 57.7. The lowest level since November, and the weakest since January. than expected, up from 63.5 last month. According to Reuters, the drop in morale is due to “concerns that political wrangling over raising the federal government’s borrowing cap could precipitate a recession.”
Moreover The US stock market fell and the US Dollar rose in concert with US Treasury bond rates. As the benchmark 10-year US Treasury bond yields approached the 3.50% critical level. Weighing on the non-yielding gold price.
The focus switches to Tuesday’s US Retail Sales and Debt Ceiling Meeting.
After the preliminary Consumer Sentiment and Inflation Expectations data. The emphasis now switches to the next top-tier economic data from the United States. The Retail Sales report, which will be released on Tuesday. Retail sales in the United States are projected to increase. to have recovered in April, with a monthly increase of 0.7% expected. Core Retail Sales are predicted to rise 0.5% in the same period, following a 0.4% dip in March.
Furthermore any significant miss in US statistics would revive fears of a US recession. Increasing market expectations of Federal Reserve rate reduction in the second half of this year. At the present, markets are pricing in an 82% likelihood that the US Federal Reserve (Fed) will keep interest rates unchanged in June. With a 33% possibility that rates would be slashed in July.
Also on the agenda is a meeting between US President Joe Biden and legislative leaders on Tuesday to discuss a strategy to lift the debt ceiling. prevent a catastrophic default by raising the country’s debt ceiling.
Meanwhile, events surrounding the US debt ceiling discussions, as well as broader market mood, will influence US Dollar values, eventually influencing the USD-denominated Gold price.
Gold Technical Outlook
Gold price managed to defend the flattish 21-Daily Moving Average (DMA) at $2,008 on a weekly closing basis. Inspiring Gold buyers to start the week on the right foot, as seen on the daily chart.
The 14-day Relative Strength Index (RSI) remains above 50, supporting traders’ ‘dip-buying’ trading approach.
On the upside, the descending trendline resistance around $2,025 is considered. As immediate resistance, over which gold buyers will target the $2,030 round figure.
However The next significant upward barrier is indicated at Thursday’s high of $2,041.
A persistent fall below the 21 DMA support, on the other hand, will begin. The decline below $1,977, the intersection of the bullish 50 DMA and the May 1 low.
Prior to that, the $2,000 bullish commitments will be tested on a psychological level.
