U.S. Treasury yields fell on Monday as investors awaited further economic data, including the JOLTs job openings and the May jobs report. The ISM’s purchasing managers’ index reports for both services and manufacturing sectors are also due, which will be critical for market sentiment. Concurrently, the European Central Bank (ECB) is expected to announce its first interest rate cut since 2019 on Thursday, ahead of the next Federal Reserve meeting on June 11-12. The dollar began the week slightly lower, influenced by last week’s data showing stabilized U.S. inflation, which supports potential Fed rate cuts later in the year.
Global Market Developments
In the global markets, the dollar index fell 1.56% in May, reflecting shifting expectations on Fed rate cuts. Sterling and the euro showed marginal increases ahead of the ECB meeting, where a rate cut is highly anticipated. Japan’s Ministry of Finance confirmed significant interventions in the forex market to support the yen, which remains weak against the dollar despite these efforts.
Short-term Market Forecast
Given the current data, the short-term outlook for silver is cautiously bullish. Traders anticipate a slowdown in U.S. economic data, which could prompt the Federal Reserve to cut interest rates later this year. Such a move would likely boost silver prices, as lower rates reduce the opportunity cost of holding non-yielding assets like bullion.
However, ongoing volatility in economic indicators will keep the market on edge in the short term, as investors await clear signals from upcoming reports. The market remains vulnerable to downside risk, especially following the confirmed double-top formation at $32.30 and $32.52.
We are cautiously optimistic because traders have been buying dips. If this pattern continues, silver prices could see another breakout to the upside. Conversely, if this buying pattern changes, prices could drop to at least $28.25.
Gold price mires in over two-week lows near $2,325 amid the Middle East optimism.
The US Dollar eases with US Treasury bond yields, as the mood stays upbeat.
The daily RSI returns below the 50 level, as Gold price eyes acceptance below the key 50-day SMA support at $2,330.
Gold price is licking its wounds while trading close to over two-week lows of $2,321, setting off the week on cautious footing. Gold price fails to find inspiration from broadly softer US Dollar and negative US Treasury bond yields.
Israel-Hamas developments, US ISM PMI in focus
Gold price is feeling the pull of gravity, courtesy of the risk-on market mood, following a late rebound in the US stocks and some optimism surrounding the Israel-Hamas conflict. Markets are digesting the latest developments on the Middle East geopolitical situation after US President Joe Biden on Friday outlined a three-stage ceasefire plan aimed at de-escalating the conflict between Israel and Hamas.
Hamas welcomed US President Biden’s cease-fire proposal for Gaza, affirming its readiness to deal positively with any proposal that offers a permanent cease-fire. Israeli Prime Minister Benjamin Netanyahu, however, rejected the idea of a permanent ceasefire, maintaining his firm stance on Israel’s conditions for ending the war.
Despite Israel’s rejection, Hamas’s positive response is keeping market participants hopeful about the potential easing of tensions between the two. The extended risk rally keeps the downward pressure intact on the safe-haven Gold price.
Further, markets also cheer encouraging China’s S&P Global Caixin Manufacturing PMI data, which improved from 51.4 in April to 51.7 in May, beating the estimated 51.5 figure. The fastening pace of recovery in the country’s manufacturing sector added to the overall economic optimism.
Looking ahead, if risk-on flows accelerate, the US Dollar and the Gold price could come under renewed selling pressure, although a strong US ISM Manufacturing PMI could save the day for the Greenback buyers. However, Gold price could still remain at the mercy of sellers.
Gold price failed to find any relief from a softer-than-expected US monthly Core Personal Consumption Expenditure (PCE) Price Index on Friday.
Attention now turns toward this week’s US employment data, which will offer fresh hints on the timing of the first interest rate cut by the US Federal Reserve (Fed).
In the meantime, the focus will remain on the developments between Israel and Hamas and the US ISM Manufacturing PMI on Monday.
Gold price technical analysis: Daily chart
As observed on the daily chart, the Gold price has breached the key 50-day Simple Moving Average (SMA) support at $2,330 early Monday.
However, Gold sellers need a daily candlestick closing below the latter to confirm a sustained breakdown.
The 14-day Relative Strength Index (RSI) is edging lower below the midline, suggesting that sellers are likely to retain control in the near term.
The next downside target for Gold price is seen at the $2,300 level, below which a drop toward the May 3 low of $2,277 will be in the offing.
Alternatively, any rebound would need acceptance above the 21-day SMA at $2,355. Further up, the May 24 high of $2,364 will come into play.
A sustained move above that level will fuel a run toward the rising wedge support-turned-resistance, then at $2,391.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Gold price mires in over two-week lows near $2,325 amid the Middle East optimism.
The US Dollar eases with US Treasury bond yields, as the mood stays upbeat.
The daily RSI returns below the 50 level, as Gold price eyes acceptance below the key 50-day SMA support at $2,330.
Gold price is licking its wounds while trading close to over two-week lows of $2,321, setting off the week on cautious footing. Gold price fails to find inspiration from broadly softer US Dollar and negative US Treasury bond yields.
Israel-Hamas developments, US ISM PMI in focus
Gold price is feeling the pull of gravity, courtesy of the risk-on market mood, following a late rebound in the US stocks and some optimism surrounding the Israel-Hamas conflict. Markets are digesting the latest developments on the Middle East geopolitical situation after US President Joe Biden on Friday outlined a three-stage ceasefire plan aimed at de-escalating the conflict between Israel and Hamas.
Hamas welcomed US President Biden’s cease-fire proposal for Gaza, affirming its readiness to deal positively with any proposal that offers a permanent cease-fire. Israeli Prime Minister Benjamin Netanyahu, however, rejected the idea of a permanent ceasefire, maintaining his firm stance on Israel’s conditions for ending the war.
Despite Israel’s rejection, Hamas’s positive response is keeping market participants hopeful about the potential easing of tensions between the two. The extended risk rally keeps the downward pressure intact on the safe-haven Gold price.
Further, markets also cheer encouraging China’s S&P Global Caixin Manufacturing PMI data, which improved from 51.4 in April to 51.7 in May, beating the estimated 51.5 figure. The fastening pace of recovery in the country’s manufacturing sector added to the overall economic optimism.
Looking ahead, if risk-on flows accelerate, the US Dollar and the Gold price could come under renewed selling pressure, although a strong US ISM Manufacturing PMI could save the day for the Greenback buyers. However, Gold price could still remain at the mercy of sellers.
Gold price failed to find any relief from a softer-than-expected US monthly Core Personal Consumption Expenditure (PCE) Price Index on Friday.
Attention now turns toward this week’s US employment data, which will offer fresh hints on the timing of the first interest rate cut by the US Federal Reserve (Fed).
In the meantime, the focus will remain on the developments between Israel and Hamas and the US ISM Manufacturing PMI on Monday.
Gold price technical analysis: Daily chart
As observed on the daily chart, the Gold price has breached the key 50-day Simple Moving Average (SMA) support at $2,330 early Monday.
However, Gold sellers need a daily candlestick closing below the latter to confirm a sustained breakdown.
The 14-day Relative Strength Index (RSI) is edging lower below the midline, suggesting that sellers are likely to retain control in the near term.
The next downside target for Gold price is seen at the $2,300 level, below which a drop toward the May 3 low of $2,277 will be in the offing.
Alternatively, any rebound would need acceptance above the 21-day SMA at $2,355. Further up, the May 24 high of $2,364 will come into play.
A sustained move above that level will fuel a run toward the rising wedge support-turned-resistance, then at $2,391.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
U.S. natural gas production ramped up as summer approached, causing downward pressure on prices. Analysts at Tudor Pickering Holt & Co. highlighted that producers were gearing up for higher summer demand, contributing to market concerns over increased supply.
The U.S. Energy Information Administration (EIA) reported an 84 billion cubic feet (Bcf) increase in inventories for the week ending May 24, surpassing the consensus estimate of 77 Bcf. Total stocks stood at 2795 Bcf, significantly above the five-year average, further exacerbating the oversupply issue.
Weather Impact on Demand
Weather patterns played a critical role in shaping demand expectations. NatGasWeather predicted very warm to hot conditions in the southern U.S. and California, with temperatures ranging from the mid-80s to 100s in desert areas. However, the northern U.S. experienced milder temperatures, which tempered overall demand. Despite these conditions, national demand for natural gas was projected to remain robust due to the high temperatures in key regions.
Market Volatility and Price Movements
The natural gas market saw increased daily volatility, with price movements expanding to a 10-20 cent range per day, compared to a more stable 10-cent range in previous months. This heightened volatility added uncertainty to market direction. At times, natural gas futures rallied due to higher demand forecasts and increased LNG export activity, however, these gains were short-lived as trader focus returned to uncertain weather and production increases
Storage and Production Trends
Natural gas production in the Lower 48 states averaged 97.7 billion cubic feet per day (bcfd) in May, slightly down from April’s 98.2 bcfd. Despite the monthly decline, daily output increased by 1.5 bcfd since early May. The rise in futures prices encouraged some drillers to ramp up production, though overall production remained down about 8% year-over-year due to delayed well completions and reduced drilling activities.
LNG Export Activity
LNG export activity increased, with gas flows to export plants rising from 11.9 bcfd in April to 12.7 bcfd in May, largely due to the resumption of operations at Freeport LNG’s plant in Texas. However, exports remained below the December 2023 record of 14.7 bcfd due to ongoing maintenance at various facilities.
The gold price (XAU/USD) retreated to the $2,330s, reversing the gains made after the release of US Personal Consumption Expenditure (PCE) data for April.
The PCE, the Federal Reserve’s preferred inflation gauge, showed core price pressures cooling to 0.2% month-over-month, down from 0.3%, according to the Bureau of Economic Analysis. Analysts had anticipated Core PCE to remain steady at 0.3%.
While the broader PCE data aligned with expectations, the unexpected drop in Core PCE indicated that inflation in the US is cooling faster than predicted. This scenario has heightened the probability of the Federal Reserve cutting interest rates sooner rather than later.
Lower interest rates generally favour gold by reducing the opportunity cost of holding the non-yielding asset, which explains the precious metal’s rise post-data release.
Impact of US Growth Data on Gold Prices
Gold experienced a recovery starting Thursday, following the release of weaker US growth data. The second estimate of US first-quarter GDP growth was revised down to an annualized 1.3% from the initial estimate of 1.6%.
The slower growth stemmed from reduced consumer spending, which is expected to keep inflation in check and the Federal Reserve on course to lower interest rates.
Consequently, the yield on the US 10-year Treasury Note dropped to 4.55% from a four-week high of 4.63%. Despite these developments, gold prices began to pull back as the weekend approached, with potential to end the day in negative territory.
According to the CME FedWatch Tool, the chances of the Fed cutting interest rates before September are low, but the probability stands at 55% for a rate cut in September.
Asian Demand for Gold as a Currency Hedge
US interest rate expectations are not the sole factor influencing the gold price. According to Daniel Ghali, a Senior Commodity Strategist at TD Securities, gold demand is also driven by Asian buyers using the metal as a hedge against their depreciating currencies relative to a strengthening US Dollar (USD).
“Precious metals are acting as a currency depreciation hedge. Case in point: fund flows into Chinese gold ETFs are rising once more at their fastest pace since the massive buying activity observed in April. US yields are surging, the dollar broke out of its lull, and yet precious metals prices have remained extremely resilient,” Ghali notes.
This trend suggests that the strength of the US Dollar may not negatively impact gold prices as much as it has historically. Consequently, gold prices could remain resilient even if the USD appreciates.
Economic Events Next Week
The upcoming week features several key economic events that could significantly impact the price of gold:
13:45 USD Final Manufacturing PMI (Forecast: 50.9, Previous: 50.9)
14:00 USD ISM Manufacturing PMI (Forecast: 49.8, Previous: 49.2)
USD ISM Manufacturing Prices (Forecast: 60.0, Previous: 60.9)
Gold spot prices closed trading around $2,327.60, slightly below the pivot point at $2,352.75. The immediate resistance level stands at $2,350.36, followed by $2,366.51 and $2,379.32.
On the support side, the immediate level is $2,324.79, with further support at $2,307.40 and $2,291.54.
However, the current price is below the 50-day Exponential Moving Average (EMA) of $2,352.75, pointing to a bearish sentiment in the market. As gold navigates these critical levels, traders should monitor these support and resistance points closely.
Natural gas futures attempt to rally further on Wednesday failed to draw enough buyers to sustain the rally and the market closed lower for the session. Like Tuesday’s strong rally, natural gas speculators tried to drive prices higher on the back of a sharp rise in crude oil futures, but unlike that move, traders decided to shift their focus on the weather and the upcoming storage report, thereby killing the rally.
September natural gas futures settled at $2.914, down $0.017 or -0.58%.
Meteorologists forecast temperatures during the month of August will come in near average after a warmer-than-normal June and July.
Natgasweather.com says: “While weather patterns have been hot the past couple weeks over much of the country, this coming weekend a weather system and accompanied cool shot will sweep down the East Coast with showers. This will bring mostly comfortable conditions over the east-central U.S. for lighter demand. It will still be hot over the West, Central, and South, but national demand will drop to more seasonal levels without hot conditions over the East.
This likely means natural gas demand will be down this week because the cooler weather will be hitting highly populated, high demand areas.
Daily September Natural Gas
Forecast
Natural gas prices are likely to continue under pressure on Thursday unless the storage number comes in better than expected. However, just like last week’s report and subsequent price action, any rallies are likely to be met with a wall of sellers.
The current daily chart pattern indicates there are multiple levels of potential resistance at $2.934, $2.966, $2.984 and $3.011. Although aggressive counter-trend buyers have been trying to sustain a series of higher bottoms at $2.800, $2.830 and $2.866, the buying doesn’t seem to be strong enough at this time to sustain a rally and change the trend to up.
As far as the U.S. Energy Information Administration’s weekly storage report is concerned, traders should look for a 34 billion cubic feet build for the week-ending July 21. This would put inventories about 4 percent above normal for this time of year. This will compare with a 20 bcf increase the same week a year earlier and a five-year average build of 47 bcf.
The key price level on the chart to watch is $2.934. A sustained move over this level will likely lead to a labored rally. A sustained move under this level will indicate the presence of sellers.
Gold (XAU/USD) has enjoyed a remarkable rally this year, peaking near $2,450 in early May. However, the upward impetus has recently started to wane, with bullion retreating over 4% from its highs in the past few trading sessions. This price correction suggests a shift in investor sentiment, with bulls likely seeking greener pastures.
With underlying and fundamental drivers reasserting themselves, gold’s weakness could persist in the near term. Sticky inflation, which could force the U.S. central bank to maintain a restrictive stance for longer, could reinforce the bearish case for non-yielding assets, creating a hostile environment for the yellow metal.
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How to Trade Gold
For traders entertaining short positions, a crucial price point to watch is the $2,335 support zone. This area represents a confluence of technical indicators, including a key trendline and the 38.2% Fibonacci retracement of the March-May rally. A decisive break below $2,335, accompanied by higher-than-average trading volume, would be a strong selling signal.
If the price falls through $2,335, the next line in the sand is the 50-day simple moving average, currently sitting at $2,325. Breaching this support could trigger a deeper pullback, with potential downside targets around $2,265, a critical Fibonacci level just below this month’s swing low.
However, the scenario isn’t entirely one-sided. If the bulls regain control and push prices higher, initial resistance looms at $2,365, followed by $2,377. A push past this latter ceiling could dampen bearish sentiment and pave the way for a rally toward $2,420. Continued strength could even bring the all-time high back into play.
Wondering about gold’s future trajectory and the catalysts that will drive volatility? Find all the answers in our free quarterly forecast. Download it now!
Strength Indicated by 20-Day MA Rise Above 200-Day MA
Today’s low is a higher low than the recent swing low at 2.475, a very minor sign of strength as it is not known whether it will remain a low. Also, the short-term 20-Day MA has started to cross above the long-term 200-Day MA today. This is another sign of strength. Potential support around the moving averages therefore is critical for the sustainability of the rally. The 200-Day line is now at 2.455 and the 20-Day line is at 2.47.
Key Support at 2.46
A decisive decline below the recent swing low and moving averages will signal a deeper retracement. Depending on when it happens, a double top may also be triggered. This week’s high would create the second top. However, the double top is just a possibility until a breakdown triggers. At that point an eventual test of support around the 50-Day MA, now at 2.06, is a possible target. Higher price areas to watch for support include the area around the 50% retracement at 2.25 and further down is the 61.8% Fibonacci retracement around 2.10. Notice that the 20-Day MA has not been tested as support since the gap up on April 26.
Further Consolidation is a Possibility
An alternative scenario may see the price of natural gas further consolidate above the 200-Day MA. Initial resistance would be around the blue dashed downtrend line. Since it is a declining line the price level represented will be falling over time. Subsequently, if the 200-Day line remains an area of support the price range would be narrowing.
Keep an Eye on the Weekly Chart
The weekly chart should also be watched. Both last week and this week have large topping tails and the candlestick patterns are bearish shooting stars. Last week’s low of 2.49 was broken to the downside earlier this week but natural gas quickly recovered and is set to close above that low this week. Nevertheless, these are bearish indications but only if there is a decisive drop below the weekly lows.
For a look at all of today’s economic events, check out our economic calendar.
The natural gas markets initially tried to rally in the early hours on Thursday, but it looks like the $2.50 level will continue to be an area of extreme interest.
I think at this point in time we are getting close to some inflection point that could determine where we go for the next several weeks.
This is not a huge surprise, because quite frankly the nonsense that we have seen in the natural gas markets was overdone yet again.
This is not a retail market
I know I’m not supposed to say this, but quite frankly natural gas markets are not a retail market. You have no business trading this but since I know many of you will do it anyway, I will do my best to break down what you are facing. We got overextended and now we need to find some type of natural level to sit. In other words, it’s overbought and now we need to correct.
That being said, you also have to understand weather patterns in the northeastern part of the United States, whether or not the Europeans are going to be coming to Henry in Louisiana to buy more natural gas, as this is the contract you are more likely than not trading, and whether or not storage and transmission lines allow for more or less supply. This is literally what your trading.
However, my email box is almost always full of questions about natural gas, so I am cognizant of the fact that a lot of people are trading it. At this point, I would anticipate that natural gas could very well fall to the $2 region, and I do think that it would be of value there. However, if you follow my work you know that I very rarely trade this with a lot of leverage, but do in fact trade it via an ETF. This allows me to take advantage of price appreciation or the depreciation, but not doing so with a ton of leverage. It’s the leverage that seems to get most people in trouble.
If you have the ability to invest and not trade, this could be a great market, but right now I just don’t see why would put a lot of money into this market try to “catch a falling knife.”
A bunch of dismal United States macroeconomic data hit the Greenback.
The focus shifts to the US Personal Consumption Expenditures Price Index.
XAU/USD under modest selling pressure but not far from its weekly high.
Spot Gold is little changed on Thursday, trading around its daily opening in the $2,340 price zone. XAU/USD extended its weekly slide to $2,322.50 during Asian trading hours, grinding higher afterwards amid a slight improvement in the market’s sentiment. The advance extended up to $2,351.72 with the release of dismal United States (US) data.
The US Bureau of Economic Analysis (BEA) reported that the country’s Gross Domestic Product (GDP) expanded at an annual rate of 1.3% in the first quarter, downwardly revising the previous estimate of 1.6%. Furthermore, Initial Jobless Claims in the week ended May 24 increased to 219K, worse than the 218K expected, while the preliminary estimate of April Wholesale Inventories increased by 0.2%, worse than the 0.1% decline anticipated.
Wall Street came under selling pressure, with the three major indexes trading in the red. At the same time, Treasury yields retreated, limiting USD strength against the bright metal. The 10-year note currently offers 4.54%, down 7 basis points (bps), while the 2-year note yields 4.92%, shedding 5 bps.
Market participants are now waiting for fresh US inflation data, which will be released on Friday. The country will publish the April Personal Consumption Expenditures (PCE) Price Index, which is foreseen at 2.7% YoY, matching March figures. The core annual reading is also expected to remain unchanged at 2.8%.
XAU/USD short-term technical outlook
XAU/USD is weak, according to technical readings in the daily chart. Technical indicators stand within neutral levels with modest downward slopes, not enough to suggest an upcoming directional movement. At the same time, a flat 20 Simple Moving Average (SMA) caps the upside at around $2,355.50, while the 100 and 200 SMAs maintain their upward slopes well below the current level.
In the near term, and according to the 4-hour chart, XAU/USD is neutral. Technical indicators stalled their advances around their midlines while the pair remains below directionless moving averages. The weekly high at around 2,364.00 is the level to surpass for bulls to retake control of the pair.
Support levels: 2,334.35 2,325.30 2,307.10
Resistance levels: 2,355.50 2,364.00 2,372.90
XAU/USD Current price: $2,347.35
A bunch of dismal United States macroeconomic data hit the Greenback.
The focus shifts to the US Personal Consumption Expenditures Price Index.
XAU/USD under modest selling pressure but not far from its weekly high.
Spot Gold is little changed on Thursday, trading around its daily opening in the $2,340 price zone. XAU/USD extended its weekly slide to $2,322.50 during Asian trading hours, grinding higher afterwards amid a slight improvement in the market’s sentiment. The advance extended up to $2,351.72 with the release of dismal United States (US) data.
The US Bureau of Economic Analysis (BEA) reported that the country’s Gross Domestic Product (GDP) expanded at an annual rate of 1.3% in the first quarter, downwardly revising the previous estimate of 1.6%. Furthermore, Initial Jobless Claims in the week ended May 24 increased to 219K, worse than the 218K expected, while the preliminary estimate of April Wholesale Inventories increased by 0.2%, worse than the 0.1% decline anticipated.
Wall Street came under selling pressure, with the three major indexes trading in the red. At the same time, Treasury yields retreated, limiting USD strength against the bright metal. The 10-year note currently offers 4.54%, down 7 basis points (bps), while the 2-year note yields 4.92%, shedding 5 bps.
Market participants are now waiting for fresh US inflation data, which will be released on Friday. The country will publish the April Personal Consumption Expenditures (PCE) Price Index, which is foreseen at 2.7% YoY, matching March figures. The core annual reading is also expected to remain unchanged at 2.8%.
XAU/USD short-term technical outlook
XAU/USD is weak, according to technical readings in the daily chart. Technical indicators stand within neutral levels with modest downward slopes, not enough to suggest an upcoming directional movement. At the same time, a flat 20 Simple Moving Average (SMA) caps the upside at around $2,355.50, while the 100 and 200 SMAs maintain their upward slopes well below the current level.
In the near term, and according to the 4-hour chart, XAU/USD is neutral. Technical indicators stalled their advances around their midlines while the pair remains below directionless moving averages. The weekly high at around 2,364.00 is the level to surpass for bulls to retake control of the pair.
