Gold Price Struggles as Yields and US Dollar Stabilize

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Gold Price Struggles as Yields and US Dollar Stabilize


Gold price remains largely unchanged amid mixed market catalysts and concerns about Federal Reserve’s rate hikes. Despite the recent two-day rebound, gold has been unable to extend its momentum, as it seesaws around $1,993-94 during early Friday. The XAU/USD tracks the latest consolidation of the US Dollar and United States Treasury bond yields ahead of a busy calendar.


US preliminary PMIs and Durable Goods Orders are important indicators for Gold traders to watch for fresh impulse. The commodity remains firmer for the fourth consecutive week as traders brace for the preliminary readings of the United States S&P Global PMIs for March and the Durable Goods Orders for February. However, the first readings of activity numbers from Europe and the UK, as well as the Retail Sales from Canada and Britain, could also keep the XAU/USD traders busy.


Recent concerns about a banking crisis and Federal Reserve moves have allowed United States Treasury bond yields and the US Dollar to stabilize. The Federal Reserve's emergency lending to banks hit record levels the last week, which raised fears of more Fed rate hikes, ultimately causing gold prices to pare recent gains. Additionally, US Treasury Secretary Yellen’s testimony in front of the House Appropriations Financial Services Subcommittee probed the market’s previous risk-on mood and allowed gold buyers to take a breather.


Gold's pullback from a seven-month-old ascending resistance line was short-lived, as the Year-To-Date (YTD) high marked earlier in the week around $2,010 acted as the last defense of the gold bears before highlighting the previous yearly top surrounding $2,070. In terms of technical analysis, the Moving Average Convergence and Divergence (MACD) indicator prints bullish signals and supports gold buyers. However, the Relative Strength Index (RSI) line, placed at 14, nears the overbought territory and suggests limited room towards the north.


To sum up, the gold price is likely to grind higher and can stay on the bull’s radar unless breaking the 100-DMA support. Traders are advised to keep an eye on the upcoming economic indicators, as they may provide fresh impetus for gold price movement.


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