The Gold Spot (XAUUSD) prices are trading at 0.40% higher as the spot price looks to rebound from a two-week low. Friday’s remarks by Federal Reserve member Christopher Waller that further tightening might be necessary if the US is to curb the prevalent high inflation initiated the gold spot’s recent decline. The remarks sent the US Dollar higher, which negatively impacted the non-yielding bullion’s appeal.
The yellow precious metal’s rebound was primarily aided by Chinese economic data that showed that the world’s second-largest economy recovery was picking up steam. The data showed that the economy expanded in line with expectations of 2.2% from 0.6% achieved in Q4 of 2022, with the year-on-year GDP exceeding the forecasted 4.0% after reaching 4.5%. The economic data helped increase the appetite for riskier assets while weighing down on the greenback. However, the Fed rate hike bets could limit the upside with the CME FedWatch tool’s probability for the 25-basis point rate hike up to 86.7% from 72.9% a week ago.
Technical
The 4H chart shows that the bulls pull back was recently halted by the 50-day moving average (50-EMA), and with the bulls reattempting another rally, a push above the 50-EMA could signal the presence of buyers. The push above the 50-EMA would bring the $2032.42/ounce and the $2049.88/ounce resistance levels into play.
However, failure to sustainably push above 50-EMA could push the price lower, with $1987.72/ounce acting as the immediate support. A breakthrough below $1987.72/ounce would immediately bring the 23.60% Fibonacci retracement level and the $1957.92/ounce support level into play. Nevertheless, the gold spot price could trade within the range formed by the 50-EMA and $1987.72/ounce support level during the day as investors look to Fed’s members’ speeches to gauge the possible monetary policy path before the blackout period starting on the 22nd of April.
Summary
Following the better-than-expected economic data from the Chinese economy, investors would now look to the US economic indicators, including the Federal Reserve members’ speech, as a potential dictator for the yellow precious metal’s movement during the day. Thus, an opportunity could exist above the 50-EMA, and the bulls would need to avoid $1943/ounce if they wish to continue their rally.
Sources: TradingView, CNBC, Reuters.
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