- Gold recovers from recent losses, buoyed by market interest despite a stronger US Dollar and higher US Treasury yields.
- De-escalation of Middle East tensions contributed to increased market stability, denting the appetite for Gold buying.
- US Durable Goods Orders were solid, but expectations for Fed rate cuts shift to later in the year.
Gold rebounded on Wednesday after experiencing two consecutive days of decline earlier in the week due to easing geopolitical tensions. Despite a strong US Dollar and higher US Treasury yields, buyers found an opportunity to purchase the dip in the gold market.
XAU/USD is currently trading at $2,327, reflecting a 0.28% gain. The calming of the Middle East conflict between Iran and Israel has helped regain stability in the market. Speculations around a Federal Reserve rate cut in June and July have shifted to expecting the first rate cut in September 2024.
The US Department of Commerce reported positive data in March for Durable Goods Orders, surpassing expectations and showing improvement from previous months.
Daily digest market movers: Gold trims its losses amid upbeat Durable Goods Orders report
- US Durable Goods Orders witnessed a significant increase in March, exceeding forecasts and previous figures, indicating a positive trend. Excluding transportation, there was a slight rise, falling slightly short of expectations.
- Upcoming data on Q1 GDP and core PCE inflation will provide insights on potential Fed interest rate adjustments. Projections suggest a minor decline in the core PCE rate, pointing towards easing inflation pressure.
- Softening economic growth in the US could prompt a rate cut in July, as indicated by the recent S&P Global PMI report.
- Traders anticipate a slight increase in the fed funds rate by the end of 2024, reflecting market expectations.
- The US 10-year Treasury benchmark rate has risen by six basis points, while the US Dollar Index (DXY) shows a modest increase.
Technical Analysis: Gold price stays firm near $2,320
Despite forming a bearish engulfing pattern, Gold’s price has shown resilience by edging higher. The key levels to watch for are $2,373 and $2,400 for potential bullish movement. On the downside, support levels lie at $2,324 and $2,300, with further downside risk extending to $2,222.
Insight:
Adding insight into the technical analysis of gold, it is noteworthy that the support and resistance levels mentioned provide crucial points for traders to monitor for potential price movements. By analyzing these levels along with market developments, traders can make informed decisions when trading gold.
