Gold price gains traction amid weaker USD on Thursday. The recent CPI report showed US inflation slowed in April, increasing bets on Fed rate cuts. A lower interest rate could benefit gold as borrowing costs decrease. Market players are focused on US economic data, as well as Fed officials’ remarks on Thursday. Hawkish comments might boost the USD and cap gold’s upside in the near term.
US Consumer Price Index (CPI) rose by 3.4% YoY in April, core CPI up by 3.6% YoY. Retail sales remained flat in April. Fed Bank of Minneapolis President Neel Kashkari suggested monitoring the economy for potential rate adjustments. Markets are pricing in a 75% chance of a rate cut by September. Global gold demand rose by 3% in Q1 2024, the strongest first quarter since 2016.
Gold price maintains a bullish stance with an ascending trend channel. Positive indicators include holding above the 100-period EMA and RSI in bullish territory. Upside barriers near $2,400 and $2,432, while downside support at $2,345 and $2,334. Technical analysis suggests further consolidation before potential upside movement.
US Dollar weakened against major currencies, with the Japanese Yen showing the most strength. The heat map indicates percentage changes in currency values against each other. Gold FAQs highlight the metal’s historical significance, central bank holdings, and inverse correlations with the USD and risk assets. Geopolitical events, interest rates, and USD performance impact gold prices.
In conclusion, gold price benefits from a weaker USD and expectations of Fed rate cuts. Economic data and Fed officials’ remarks play a crucial role in shaping market sentiment. Understanding factors influencing gold prices, such as inflation, central bank actions, and currency movements, is essential for investors. Gold’s safe-haven status and historical significance continue to attract investors looking to diversify their portfolios.
