The crude oil markets have been very noisy over the last several days, and at this point in time it’s obvious to me that the market is going to continue to search for some type of stability.
After all, we have seen a massive run higher, followed by a massive selloff that has made both grades of crude oil that I follow very difficult to hang onto.
West Texas Intermediate Crude
The WTI Crude market has gone back and forth during the early hours on Thursday, as we continue to dance around the $82.50 level. Furthermore, we also have the 50-Day EMA underneath offering support, and we are essentially in the middle of the overall consolidation range between the $80 level on the bottom, and the $85 level on the top. As things stand right now, this is a market that looks very neutral, but it seems as if we are completely ignoring a lot of the geopolitical propellants out there that could jump into this market.
Brent Crude
Brent markets of course have behave very similarly, with the 50-Day EMA hanging around the $85.75 level. This is a market that seems like it is trying to sort out what it was to do as well, with the $84.50 level underneath being a major support level, and the $90 level above being a major resistance barrier. As we are close to the middle of the market, I don’t necessarily think we are in a scenario where you would see a lot of certainty, so therefore I think you have to look at this through the prism of either a longer-term trade that is trying to set up, or to simply trading back and forth.
Looking at the overall situation around the world, supply is still an issue, and we obviously have a lot of geopolitical concerns. Those geopolitical concerns could cause massive headaches for crude oil markets, and then of course the latest headlines coming out of Iran or Israel could have a direct effect on these markets. Because of this, be very cautious with your position sizing.
Monthly support is also at the 1.59 swing low. During April natural gas has remained within the range from March forming a possible second sequential inside month. Therefore, a sustained breakdown below 1.59, if it occurs before the end of the month, will trigger an inside month breakdown from March. That’s a bearish signal that could be followed by an expansion of volatility.
Strong Support at or Above 1.52 May Continue
As noted above, the 1.52 price level is significant and may continue to act as support. Consequently, if volatility expands there is a possibility the 1.52 level is broken. If that happens the next lower target is around 1.44, a 29-year low. However, there is another price area to watch at 1.49. That is the target from an extended retracement of the six-month rally that began from the prior trend low a year ago.
Contraction in Volatility
If April ends without a breakdown below last month’s low, there will be two inside months further highlighting the decline in volatility experienced recently. As price compresses it prepares for its next move and a pickup in volatility. That could come from a bounce off monthly support or a breakdown.
For a look at all of today’s economic events, check out our economic calendar.
The US Gross Domestic Product missed expectations, spurring concerns.
Inflationary pressures increased in the United States in the first quarter of the year.
XAU/USD holds on to modest intraday gains, with the bearish case losing steam.
Spot Gold remains confined to familiar levels, trading at around $2,330 in the American afternoon. XAU/USD experienced some volatility following the release of United States (US) macroeconomic data, which put a sour taste in traders’ mouths. The country released the preliminary estimate of the Q1 Gross Domestic Product, which showed the economy grew at an annual pace of 1.6% in the three months to March, missing the expected 2.5% and much weaker than the 3.4% posted in the last quarter of 2023.
Furthermore, the Bureau of Economic Analysis (BEA) reported that the Personal Consumption Expenditures (PCE) Price Index rose at a 3.4% annualized pace for the quarter, much higher than the previous 1.8% and the biggest gain in a year. In a few words, growth slowed, but the economy continued expanding while inflation picked up. Such a scenario further delays a potential rate cut from the Federal Reserve (Fed). The US Dollar surged while Wall Street plummeted as an immediate reaction to the news. The USD, however, was unable to preserve its momentum as US data throughout the week has been disappointing.
The initial fears receded, and US indexes trimmed part of their losses but retain the red. Nevertheless, continued demand for safety maintained XAU/USD evenly balanced.
XAU/USD short-term technical outlook
From a technical point of view, XAU/USD has made little progress. It is trading just above the 23.6% Fibonacci retracement of the $1,996.06/$2,431.43 rally. In the daily chart, a bullish 20 Simple Moving Average (SMA) stands around the same level, with the price struggling to extend gains above it. The longer moving averages, in the meantime, maintain their bullish slopes far below the shorter one. Finally, the Momentum indicator keeps heading south at around its 100 level, but the Relative Strength Index (RSI) indicator turned north within positive levels.
Generally speaking, Gold tends to benefit against the USD in a risk-averse environment, which skews the risk to the upside. In the near term, and according to the 4-hour chart, XAU/USD offers a neutral-to-bullish stance. The Momentum indicator is losing its upward strength but holds above its 100 line, while the RSI indicator consolidates around 47, reflecting the absence of apparent directional strength. At the same time, a mildly bullish 100 SMA provides dynamic resistance at around $2,343.50, while the 20 SMA aims lower below the current level.
Support levels: 2,310.00 2,295.20 2,282.90
Resistance levels: 2,343.50 2,361.55 2,372.90
XAU/USD Current price: $2,329.29
The US Gross Domestic Product missed expectations, spurring concerns.
Inflationary pressures increased in the United States in the first quarter of the year.
XAU/USD holds on to modest intraday gains, with the bearish case losing steam.
Spot Gold remains confined to familiar levels, trading at around $2,330 in the American afternoon. XAU/USD experienced some volatility following the release of United States (US) macroeconomic data, which put a sour taste in traders’ mouths. The country released the preliminary estimate of the Q1 Gross Domestic Product, which showed the economy grew at an annual pace of 1.6% in the three months to March, missing the expected 2.5% and much weaker than the 3.4% posted in the last quarter of 2023.
Furthermore, the Bureau of Economic Analysis (BEA) reported that the Personal Consumption Expenditures (PCE) Price Index rose at a 3.4% annualized pace for the quarter, much higher than the previous 1.8% and the biggest gain in a year. In a few words, growth slowed, but the economy continued expanding while inflation picked up. Such a scenario further delays a potential rate cut from the Federal Reserve (Fed). The US Dollar surged while Wall Street plummeted as an immediate reaction to the news. The USD, however, was unable to preserve its momentum as US data throughout the week has been disappointing.
The initial fears receded, and US indexes trimmed part of their losses but retain the red. Nevertheless, continued demand for safety maintained XAU/USD evenly balanced.
XAU/USD short-term technical outlook
From a technical point of view, XAU/USD has made little progress. It is trading just above the 23.6% Fibonacci retracement of the $1,996.06/$2,431.43 rally. In the daily chart, a bullish 20 Simple Moving Average (SMA) stands around the same level, with the price struggling to extend gains above it. The longer moving averages, in the meantime, maintain their bullish slopes far below the shorter one. Finally, the Momentum indicator keeps heading south at around its 100 level, but the Relative Strength Index (RSI) indicator turned north within positive levels.
Generally speaking, Gold tends to benefit against the USD in a risk-averse environment, which skews the risk to the upside. In the near term, and according to the 4-hour chart, XAU/USD offers a neutral-to-bullish stance. The Momentum indicator is losing its upward strength but holds above its 100 line, while the RSI indicator consolidates around 47, reflecting the absence of apparent directional strength. At the same time, a mildly bullish 100 SMA provides dynamic resistance at around $2,343.50, while the 20 SMA aims lower below the current level.
The provides comprehensive insights into prevailing market trends, technological advancements, revenue growth, and prospective business expansions. This study meticulously explores the market landscape, conducting an in-depth analysis of market overview, industry chain dynamics, sales, revenue, growth rates, gross margins, major manufacturers, development trends, and future forecasts. Additionally, the report delves into detailed profiles of key players, offering a thorough SWOT analysis, along with volume and value assessments for each market segment.
Investors are focusing on several critical economic indicators scheduled for release this week. The US gross domestic product (GDP) for the first quarter is expected to show a growth of 2.4%, according to economists surveyed by Dow Jones. Moreover, weekly initial jobless claims and the personal consumption expenditures (PCE) price index, which is the Fed’s favored gauge of inflation, are also due. These data points are likely to be significant in shaping the Federal Reserve’s upcoming policy decisions.
Market Sentiment and Expectations
While the market is not anticipating changes in interest rates at the next Federal Reserve meeting, investors are watching for hints of potential rate cuts later this year. Market sentiment, as tracked by CME Group’s FedWatch tool, suggests a possible rate cut by September, depending heavily on the trend of incoming economic data. Furthermore, gold prices have corrected significantly, dropping over $100 from the April 12 peak of $2,431.29, influenced by profit-taking and easing tensions in the Middle East.
Short-Term Outlook for Gold
The short-term direction for gold prices will depend heavily on the upcoming US economic data releases. If the core PCE index meets or falls below expectations, the dollar could weaken further, which might push gold prices higher. On the other hand, if inflation figures come in above expectations, gold might face downward pressure as it would likely lead to a more aggressive interest rate stance from the Fed.
In conclusion, the gold market is displaying cautious optimism, bolstered by a weakening dollar and strategic purchases from Asia, particularly China. However, the upcoming US economic data and Federal Reserve policy decisions are key factors that could influence market sentiment. Traders are preparing for a potential uptick in gold prices, dependent on favorable economic reports and stable interest rate projections.
Oil prices remained stable on Thursday, balancing the effects of decreased fuel demand in the U.S.—the world’s largest oil consumer—with potential geopolitical conflicts in the Middle East. Recent data from the U.S. Energy Information Administration revealed a significant drop in gasoline and distillate fuel demand, underscoring a slowdown in U.S. economic activities.
Despite this, escalating tensions in the Gaza Strip and potential disruptions in Middle Eastern oil supplies are keeping market sentiments cautious. Analysts predict that summer demand, supply constraints, and Chinese and Eurozone economic data will be key drivers of oil prices this quarter.
Gold price pauses losing streak, as focus shifts to the high-impact US Q1 GDP data.
US Dollar decline offers comfort to Gold price amid ebbing Middle East tensions.
Gold price closes Wednesday below 21-day SMA but RSI stays bullish.
Gold price is breathing a sigh of relief early Thursday after testing offers near $2,315 once again. Broad risk-aversion seems to be helping Gold price find a floor, as traders refrain from placing any fresh directional bets on the bright metal ahead of the preliminary reading of the US first-quarter Gross Domestic Product (GDP) due later on Thursday.
Will US GDP data rescue Gold price?
Risk-off sentiment remains in full swing in Asia this Thursday, as market participants sulk following Meta’s weak revenue guidance even though the company’s first-quarter earnings results topped estimates. Meta shares plunged 16% in post-market trading after the company said it expects sales in the second quarter of $36.5 billion to $39 billion, below analysts’ estimate of $38.3 billion. Meanwhile, Meta’s net income more than doubled to $12.37 billion from $5.71 billion over the year.
Investors also stay risk-averse amid mounting risks of a Japanese forex market intervention, as the USD/JPY pair renews fresh 34-year highs near 155.50. Additionally, a sense of caution also prevails, as the upcoming quarterly US GDP and PCE inflation prints could shed more light on the US economic resilience, as well as, on the Federal Reserve (Fed) interest rate outlook.
Weak S&P Global US business PMI data already cast doubt on the US economic prospects amid increased expectations that the Fed could maintain interest rates ‘higher for longer’. Markets price in the first Fed rate cut in September, according to the CME Group’s FedWatch Tool. Meanwhile, the total easing expected this year would just be 40 basis points (bps), a sea change from about 150 basis points of cuts priced in at the beginning of the year, per Reuters.
Meanwhile, the latest data from the UK’s Office for National Statistics (ONS) showed early Thursday that shipping traffic through the Suez Canal artery in Egypt has plunged by 66%, in the face of the Iran-backed Houthi attacks, flagging higher inflation risks.
Amidst a risk-off mood and worries over inflation resurgence worldwide, Gold price is attempting a tepid recovery. Although any upside attempts are likely to remain limited ahead of the key US data flow.
Gold price technical analysis: Daily chart
As observed on the daily chart, Gold price settled Wednesday below the key 21-day Simple Moving Average (SMA), then at $2,318, reinforcing bearish interests.
However, the 14-day Relative Strength Index (RSI), a leading indicator, still holds well above the midline, near 56.00, indicating that a renewed downside in Gold price could be seen as a good entry position for buyers.
If Gold sellers regain control, Gold price could challenge the $2,300 threshold again, below which Tuesday’s low of $2,291 will be targetted. The last line of defense for Gold buyers could be the early April low near $2,265.
On the flip side, a sustained recovery above the 21-day SMA support-turned-resistance, now at $2,324, could revive bullish commitments for a test of the $2,350 psychological level.
Further up, Gold buyers will target the static resistance near $2,360-$2,365.
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 pauses losing streak, as focus shifts to the high-impact US Q1 GDP data.
US Dollar decline offers comfort to Gold price amid ebbing Middle East tensions.
Gold price closes Wednesday below 21-day SMA but RSI stays bullish.
Gold price is breathing a sigh of relief early Thursday after testing offers near $2,315 once again. Broad risk-aversion seems to be helping Gold price find a floor, as traders refrain from placing any fresh directional bets on the bright metal ahead of the preliminary reading of the US first-quarter Gross Domestic Product (GDP) due later on Thursday.
Will US GDP data rescue Gold price?
Risk-off sentiment remains in full swing in Asia this Thursday, as market participants sulk following Meta’s weak revenue guidance even though the company’s first-quarter earnings results topped estimates. Meta shares plunged 16% in post-market trading after the company said it expects sales in the second quarter of $36.5 billion to $39 billion, below analysts’ estimate of $38.3 billion. Meanwhile, Meta’s net income more than doubled to $12.37 billion from $5.71 billion over the year.
Investors also stay risk-averse amid mounting risks of a Japanese forex market intervention, as the USD/JPY pair renews fresh 34-year highs near 155.50. Additionally, a sense of caution also prevails, as the upcoming quarterly US GDP and PCE inflation prints could shed more light on the US economic resilience, as well as, on the Federal Reserve (Fed) interest rate outlook.
Weak S&P Global US business PMI data already cast doubt on the US economic prospects amid increased expectations that the Fed could maintain interest rates ‘higher for longer’. Markets price in the first Fed rate cut in September, according to the CME Group’s FedWatch Tool. Meanwhile, the total easing expected this year would just be 40 basis points (bps), a sea change from about 150 basis points of cuts priced in at the beginning of the year, per Reuters.
Meanwhile, the latest data from the UK’s Office for National Statistics (ONS) showed early Thursday that shipping traffic through the Suez Canal artery in Egypt has plunged by 66%, in the face of the Iran-backed Houthi attacks, flagging higher inflation risks.
Amidst a risk-off mood and worries over inflation resurgence worldwide, Gold price is attempting a tepid recovery. Although any upside attempts are likely to remain limited ahead of the key US data flow.
Gold price technical analysis: Daily chart
As observed on the daily chart, Gold price settled Wednesday below the key 21-day Simple Moving Average (SMA), then at $2,318, reinforcing bearish interests.
However, the 14-day Relative Strength Index (RSI), a leading indicator, still holds well above the midline, near 56.00, indicating that a renewed downside in Gold price could be seen as a good entry position for buyers.
If Gold sellers regain control, Gold price could challenge the $2,300 threshold again, below which Tuesday’s low of $2,291 will be targetted. The last line of defense for Gold buyers could be the early April low near $2,265.
On the flip side, a sustained recovery above the 21-day SMA support-turned-resistance, now at $2,324, could revive bullish commitments for a test of the $2,350 psychological level.
Further up, Gold buyers will target the static resistance near $2,360-$2,365.
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.
Important DisclaimersThe content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party’s services, and does not assume responsibility for your use of any such third party’s website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.Risk DisclaimersThis website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
Important DisclaimersThe content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party’s services, and does not assume responsibility for your use of any such third party’s website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.Risk DisclaimersThis website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
United States´ second round of tepid data weighed on Wall Street.
Upcoming US data could speed up the Federal Reserve’s decision to trim rates.
XAU/USD turned near-term neutral, bulls seem unwilling to give up.
Gold consolidative phase continued on Wednesday, with XAU/USD seesawing around $2,325.00 a troy ounce. Financial markets are gearing up for upcoming first-tier United States (US) data following a batch of discouraging figures. Following softer-than-anticipated S&P Global PMIs released on Monday, the country reported Durable Goods Orders rose 2.3% in March, missing the 2.5% anticipated. Furthermore, the February reading was downwardly revised to 1.5% from the previous estimate of 2.2%.
Overall, US data is showing the economy is not doing well enough for the Federal Reserve (Fed) to maintain rates at current record highs for as long as policymakers may want. Market participants are starting to suspect so and will get some certainties in the next couple of days. On Thursday, the US will release the preliminary estimate of the Q1 Gross Domestic Product (GDP), which is expected to show that the economy grew at an annualized pace of 2.5% in the three months to March. On Friday, the focus will shift to the March Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s (Fed) favorite inflation gauge.
Meanwhile, intraday news affected Wall Street. US indexes trade with modest losses, unable to replicate the positive tone of their Asian and European counterparts. The US Dollar is also suffering from softer-than-anticipated figures, although activity remains limited across the different boards.
XAU/USD short-term technical outlook
XAU/USD keeps hovering around the 23.6% Fibonacci retracement of the $1,996.06/$2,431.43 rally, unable to clearly recover above the level. The daily chart shows the pair is also stuck around a bullish 20 Simple Moving Average (SMA), while technical indicators lack directional strength just above their midlines. It seems that sellers are not yet willing to jump in while buyers are making tepid attempts to resume the rally.
Technical readings in the 4-hour chart show limited bullish potential, as the pair trades below the 20 and 100 Simple Moving Averages (SMAs), with the shorter one accelerating south below the longer one, usually seen as a sign of growing selling pressure. Technical indicators, in the meantime, remain within negative levels, with the Momentum indicator advancing and the Relative Strength Index (RSI) indicator consolidating around 43.
Support levels: 2,310.00 2,295.20 2,282.90
Resistance levels: 2,348.30 2,361.55 2,372.90
XAU/USD Current price: $2,328.21
United States´ second round of tepid data weighed on Wall Street.
Upcoming US data could speed up the Federal Reserve’s decision to trim rates.
XAU/USD turned near-term neutral, bulls seem unwilling to give up.
Gold consolidative phase continued on Wednesday, with XAU/USD seesawing around $2,325.00 a troy ounce. Financial markets are gearing up for upcoming first-tier United States (US) data following a batch of discouraging figures. Following softer-than-anticipated S&P Global PMIs released on Monday, the country reported Durable Goods Orders rose 2.3% in March, missing the 2.5% anticipated. Furthermore, the February reading was downwardly revised to 1.5% from the previous estimate of 2.2%.
Overall, US data is showing the economy is not doing well enough for the Federal Reserve (Fed) to maintain rates at current record highs for as long as policymakers may want. Market participants are starting to suspect so and will get some certainties in the next couple of days. On Thursday, the US will release the preliminary estimate of the Q1 Gross Domestic Product (GDP), which is expected to show that the economy grew at an annualized pace of 2.5% in the three months to March. On Friday, the focus will shift to the March Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s (Fed) favorite inflation gauge.
Meanwhile, intraday news affected Wall Street. US indexes trade with modest losses, unable to replicate the positive tone of their Asian and European counterparts. The US Dollar is also suffering from softer-than-anticipated figures, although activity remains limited across the different boards.
XAU/USD short-term technical outlook
XAU/USD keeps hovering around the 23.6% Fibonacci retracement of the $1,996.06/$2,431.43 rally, unable to clearly recover above the level. The daily chart shows the pair is also stuck around a bullish 20 Simple Moving Average (SMA), while technical indicators lack directional strength just above their midlines. It seems that sellers are not yet willing to jump in while buyers are making tepid attempts to resume the rally.
Technical readings in the 4-hour chart show limited bullish potential, as the pair trades below the 20 and 100 Simple Moving Averages (SMAs), with the shorter one accelerating south below the longer one, usually seen as a sign of growing selling pressure. Technical indicators, in the meantime, remain within negative levels, with the Momentum indicator advancing and the Relative Strength Index (RSI) indicator consolidating around 43.
