Gold prices recovered some ground earlier on Thursday during the North American session after US economic data suggested that factory gate inflation continues decelerating. At the same time, consumer spending was debilitated due to US tariffs. At the time of writing, XAU/USD trades at $3,202, up by 0.82%.
XAU/USD gains 0.82% after weaker inflation and spending data revive easing hopes, lifting Bullion off five-week low
After diving to a five-week low of $3,120, the non-yielding metal found bids that pushed Bullion back above $3,200. Data from the United States (US) showed that the Producer Price Index (PPI) in April fell unexpectedly by 0.5% MoM, missing an estimated 0.2% increase. The core PPI dropped by 0.4%, below forecasts of a 0.3% expansion.
At the same time, Retail Sales for the same period slowed, edging up by 0.1% MoM, after March’s figures were upwardly revised to 1.7%. Economists had expected the numbers to remain unchanged compared to the previous month.
Initial Jobless Claims for the week ending May 10 rose by 229,000, as expected, unchanged from the previous week.
XAU/USD edged up after the data, and so far, bulls have reclaimed the $3,200 figure, as the Greenback, as measured by the US Dollar Index (DXY), fell 0.15% to 100.88.
Market participants increased their bets that the Federal Reserve (Fed) will ease policy by 53 basis points (bps) in 2025, up from the 48.5 expected on Wednesday.
The de-escalation of the US-China trade war impacted the bullion price amid improved risk appetite. Gold fell from around $3,326 to $3,207, resulting in a loss of over $120. However, it has since recovered, as US data reflects a sluggish economy.
Ahead in the week, the US economic docket will feature further Fed speaking and the University of Michigan (UoM) Consumer Sentiment.
XAU/USD Price Forecast: Technical outlook
From a technical standpoint, Gold’s bounce could be short-lived if buyers fail to achieve a daily close above $3,200. In that case, they must surpass the May 14 peak of $3,257 to remain hopeful of testing $3,300 and trimming weekly losses. Nevertheless, momentum favors further downside, as depicted by the Relative Strength Index (RSI). With that in mind, traders should be warned that the ongoing leg-up could be a correction of an ongoing downtrend.
On the flipside, if XAU/USD closed on a daily basis below $3,200, further downside is seen, with the 50-day Simple Moving Average (SMA) at $3,155 seen as the next support level, ahead of $3,100.
XAU/USD gains 0.82% after weaker inflation and spending data revive easing hopes, lifting Bullion off five-week low
After diving to a five-week low of $3,120, the non-yielding metal found bids that pushed Bullion back above $3,200. Data from the United States (US) showed that the Producer Price Index (PPI) in April fell unexpectedly by 0.5% MoM, missing an estimated 0.2% increase. The core PPI dropped by 0.4%, below forecasts of a 0.3% expansion.
At the same time, Retail Sales for the same period slowed, edging up by 0.1% MoM, after March’s figures were upwardly revised to 1.7%. Economists had expected the numbers to remain unchanged compared to the previous month.
Initial Jobless Claims for the week ending May 10 rose by 229,000, as expected, unchanged from the previous week.
XAU/USD edged up after the data, and so far, bulls have reclaimed the $3,200 figure, as the Greenback, as measured by the US Dollar Index (DXY), fell 0.15% to 100.88.
Market participants increased their bets that the Federal Reserve (Fed) will ease policy by 53 basis points (bps) in 2025, up from the 48.5 expected on Wednesday.
The de-escalation of the US-China trade war impacted the bullion price amid improved risk appetite. Gold fell from around $3,326 to $3,207, resulting in a loss of over $120. However, it has since recovered, as US data reflects a sluggish economy.
Ahead in the week, the US economic docket will feature further Fed speaking and the University of Michigan (UoM) Consumer Sentiment.
XAU/USD Price Forecast: Technical outlook
From a technical standpoint, Gold’s bounce could be short-lived if buyers fail to achieve a daily close above $3,200. In that case, they must surpass the May 14 peak of $3,257 to remain hopeful of testing $3,300 and trimming weekly losses. Nevertheless, momentum favors further downside, as depicted by the Relative Strength Index (RSI). With that in mind, traders should be warned that the ongoing leg-up could be a correction of an ongoing downtrend.
On the flipside, if XAU/USD closed on a daily basis below $3,200, further downside is seen, with the 50-day Simple Moving Average (SMA) at $3,155 seen as the next support level, ahead of $3,100.
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The price of Gold has come under considerable pressure in recent days, Commerzbank's commodity analyst Carsten Fritsch notes.Gold struggles to attract buyers despite recent price decline
"The significant reduction in reciprocal tariffs between the USA and China has reduced demand for Gold as a safe haven. The uncertainty triggered by the trade conflict had driven the Gold price from one record high to the next until April."
"The safe-haven premium included in the price is now falling again. In addition, market participants have noticeably scaled back their interest rate cut expectations for the Fed, as the risk of a US recession has decreased due to the (temporary) agreement between the US and China."
"All of this speaks in favour of a further fall in the price of Gold, especially as buying interest has not increased following the recent price falls - in contrast to previous falls."
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.