The price of gold has surged to a two-week high due to fresh selling of the US Dollar. The ongoing bets of a rate cut by the Federal Reserve have led to a decrease in US bond yields, which in turn has weakened the dollar. Traders are keeping an eye on US jobless claims data before the release of the Nonfarm Payrolls report on Friday for further direction.
The recent rate cut by the Bank of Canada and expectations of a cut by the European Central Bank have supported the bullish bias for gold. The possibility of the Federal Reserve also cutting rates has further boosted the precious metal. Geopolitical tensions in the Middle East have added to the safe-haven appeal of gold. However, the upside for gold remains limited as traders await the NFP report.
Mixed US macroeconomic data released on Wednesday has reinforced expectations of Federal Reserve rate cuts and pushed Treasury bond yields lower. The lower yields have benefited gold, a non-yielding asset. The US Dollar has struggled to make gains as a result. The release of the Weekly Initial Jobless Claims data is awaited by traders, but the focus remains on the NFP report on Friday.
Technical analysis suggests that gold may face resistance near the $2,400 mark, with potential support at the $2,340 zone. A break below $2,360 could lead to further declines towards the $2,280 support level. A move above $2,364 could trigger more bullish activity, with potential resistance at $2,425 and $2,450.
The US Dollar weakened against major currencies today, with the Swiss Franc registering the highest gain. The heat map shows the percentage change of the USD against other major currencies. Traders are closely monitoring the currency market alongside gold prices to gauge market sentiment and direction.
In conclusion, the price of gold has surged to a two-week high due to the weakening US Dollar and expectations of rate cuts by central banks. Mixed US macroeconomic data and lower Treasury bond yields have supported the bullish bias for gold. Traders are awaiting the NFP report for further direction, while technical analysis suggests potential resistance at $2,400 and support at $2,340. The US Dollar weakened against major currencies, with the Swiss Franc recording the highest gain. Market participants are closely watching currency movements alongside gold prices for market sentiment and direction.
