Gold Weekly Forecast: XAU/USD bulls not yet ready to give up on additional gains

1   Ari managed to make a profit for the fourth week in a row.

2    XAU / USD buyers are still maintaining the critical level of $ 1,900.

3   FXStreet Forecast Survey also reveals a clumsy shift in a monthly view.

 

The XAU / USD pair tried to find direction earlier in the week due to the lack of macroeconomic releases and key underlying factors. However, the couple resumed their withdrawal on Tuesday and began a technical rally after a break of more than $ 1,900. Although gold was able to maintain strong momentum on Wednesday, it reversed its direction after renewing its highest level since early January. At $ 1,912 Supported by weekends, the pair stabilized around $ 1,900 and closed the fourth week in a row in the positive range.

What happened last week

While no significant data was released on Monday, market participants closely followed Fedspeak. Federal Reserve Governor Lael Brainard reiterated that the Fed has the means to reduce inflation if it stays above the Fed target. As for the political perspective, "there will come a time when we can say more about change in monetary policy, but this is not the time we are still in a pandemic," he said. Louis Fed President James Bullard at Yahoo Finance. Moreover, Kansas City President Esther George has urged politicians not to rule out the risk of higher inflation. These remarks could not provoke a constant reaction in the market, and gold varied in a large, scanty range.

On Tuesday, lower Wall Street indices opened significantly higher and the S&P 500 index rose almost 1%, lowering the yields on US government bonds. While ten-year U.S. T-bonds lost 2.7% every day, the total strength of gold is. On top of that, the technical buying pressure increased as the price rose above $ 1,900 and gold last reached its highest level since January 8 at $ 1,912 in European trading hours on Wednesday. However, the modest recovery of US bonds later in the day forced the XAU / USD to return south and close below $ 1,900.

The U.S. Bureau of Economic Analysis (BEA) announced Thursday that it had left unchanged its annual gross domestic product (GDP) growth rate in the first quarter at 6.4% that I set elsewhere. Other U.S. data found that the first weekly unemployment claims fell to a one-year low of 406,000. On a negative note, the U.S. Census Bureau reported that orders for various commodities fell 1.3% in April compared to analyst estimates for a 0.7% increase. These mixed figures were largely ignored by market participants and the ten-year US Treasury bond rate extended its recovery, leading to a negative daily close for the second day for XAU / USD.

Finally, BEA said on Friday that the PCE (personal consumption expenditure) price index rose to 3.1% year-on-year in April from 1.9% in March. With the initial reaction, the US dollar index rose to its strongest level in over ten days at 90.44, but lost its momentum in order for gold to offset its daily losses.

Next week

There will be no macroeconomic data releases that could potentially affect gold prices on Monday and markers in the US will be closed due to the Memorial Day holiday. The Eurozone Consumer Price Index (CPI) and the US ISM Manufacturing PMI will be presented to our driving force. A soft reading of inflation from the EU is likely to help the USD outperform its competition, as it suggests that the European Central Bank is unlikely to consider a hawkish change in its policy in the absence of price pressure.

On Wednesday, investors will look for new data on inflation forecast in the Fed's Beige Book. If the publication points to rising input prices due to supply constraints and ongoing labor demand problems, gold could be pushed further down between rising US bonds and vice versa. On Thursday, the report on the employment of the Automated Data Processing Research Institute (ADP) for the Private Sector will be displayed at the US Economic Accounts Bank.

Before the weekend, the U.S. Bureau of Labor Statistics released its expected job report in May. The market consensus shows an increase of 621,000 in Nonfarm Payments (NFPs). Earlier this month, data with the NFP rose to 266,000 in April, with missing analysts hitting a wide margin at 978,000 and triggering sales in the USD. Similarly, a positive surprise could boost first money, while a disappointing pressure is likely to enable the XAU / USD to recover a strong month

Golden technical perspectives

On the daily chart, the Relative Strength Index (RSI) indicator still stands above 70, indicating that gold is still technically surplus. However, as long as buyers continue to protect $ 1,900, there may be additional profits in the books. Moreover, the price is still trading above the rising line from March 31st. Initial resistance is at $ 1,912 (May 26 high) before $ 1,930 (static level) and $ 1,953 (January 5 high).

On the other hand, $ 1,900 (psychological level) fits as the first support before $ 1,870 (static level, rising line). A daily close below the latter could lure traders and pull gold back to the 200-day SMA, which is currently around $ 1,845.

Gold sentiment survey

The FXStreet Forecast Survey shows that next week experts will see moderately higher gold discounts with an average target of $ 1,909. In the one-month outlook, however, the forecast is weak and most experts see gold at the end of the second quarter. a profound correction.