• Robust US data and concerns in the Middle East fuel gold’s increase to $2,280.
• A tight labor market, high US Treasury yields, and a strong US dollar offset geopolitical concerns.
• Mester projects three rate reductions in 2024, balancing inflation and employment threats, but he needs more information for a May rate cut.
• Regarding rate duration, Daly supports three rate decreases as an estimate rather than a guarantee.

The price of Gold rose to fresh all-time highs of $2,276 late in the North American session despite rising US Treasury yields and geopolitical concerns. The US economy’s economic data caused investors to flee to safe-haven assets, which increased the price of yellow metal. As of this writing, XAU/USD is trading at $2,280, up over 1% from the previous close.

Despite Monday’s spike in US rates and the strong US dollar, Gold’s latest increase was driven by Israel’s attack on an Iran embassy in Syria on April 1. In addition, the US Census Bureau reported an improvement in factory orders. At the same time, the US Bureau of Labour Statistics (BLS) revealed a tight labor market with a rise in job openings.

Meanwhile, newswires carried statements from Federal Reserve (Fed) officials, including Presidents Loretta Mester of the Cleveland Fed and Mary Daly of the San Francisco Fed.

 

Gold price overlooks positive US data and high US rates in the Daily Digest Market Movers

• According to the February Job Openings and Labour Turnover (JOLTS) summary, job openings remained unchanged. The total came to 8.756 million, marginally more than the 8.75 million predicted and the corrected 8.748 million from the previous month.
• After falling by -3.4% in January, factory orders increased by 1.4% in February, above estimates of a 1% increase. Despite insufficient information for a May meeting decrease, Cleveland Fed Loretta Mester expects three rate cuts in 2024. Mester said that the Fed would have to strike a balance between the risks of inflation and employment.
• Despite insufficient information for a May meeting decrease, Cleveland Fed Loretta Mester expects three rate cuts in 2024. Mester said that the Fed would have to strike a balance between the risks of inflation and employment.
• The president of the San Francisco Fed, Mary Daly, stated that the Fed must determine how long to maintain present rates. She clarified that her support for three rate decreases is an estimate rather than a commitment.
• In response to the most recent inflation data, Fed Chair Jerome Powell said on Friday that it aligned with their expectations and that the Fed would not overreact. This implies that the US central bank would continue to adopt a wait-and-see attitude when it comes to future monetary policy decisions.
• According to the CME FedWatch Tool, traders presently give the possibility of the US central bank lowering borrowing prices a 58% likelihood of happening in terms of future interest rate changes by the Federal Reserve.

Technical analysis: Despite an overbought RSI, the gold advance continues

The yellow metal appears to be approaching $2,300 on the XAU/USD daily chart, indicating fresh buying pressure in the Relative Strength Index (RSI). As the Relative Strength Index (RSI) stated on Monday, “The XAU/USD daily chart depicts Gold’s last uptick to new all-time highs, achieved on lower momentum.” Nonetheless, the RSI has blasted above the 80.00 barrier, indicating that buyers are in control.

The psychological $2,350 number would come next as resistance, with price action now in unknown terrain. The next resistance level would be the $2,300 mark. $2,400 would be up next.

However, corrections might be encouraged if XAU/USD exceeds $2,250. The $2,200 mark would be the initial support, then the high from March 8 converted into support at $2,195 before continuing its losses to $2,150.