• Gold price recovers despite the renewed USD demand on Wednesday.

• Investors place lower bets on the potential Fed interest rate cuts in 2024.

The Fed’s (Fed) Philip Jefferson, Susan Collins, and Lisa Cook are scheduled to speak later on Wednesday.

Gold price (XAU/USD) attracts some buyers during the Asian trading hours on Wednesday. Safe-haven demand, fueled by geopolitical tensions and uncertainty, as well as ongoing central bank purchases, might contribute to a rally in gold. Nonetheless, the hawkish remarks from Federal Reserve (Fed) officials might dampen hopes for potential interest rate cuts in 2024, despite weaker-than-expected US employment reports in April. This, in turn, might drag the precious metal lower.

 

Philip Jefferson of the Federal Reserve (Fed), Susan Collins, and Lisa Cook are scheduled to speak later on Wednesday. The Fed policymakers’ hawkish comments could strengthen the US dollar and weaken gold priced in USD. The University of Michigan’s assessment on consumer mood on Friday will be closely watched by gold speculators.

Daily Digest Market Movers: Despite the uncertainty, the price of gold is rising

• Neel Kashkari, the president of the Minneapolis Fed Bank, stated on Tuesday that it is premature to declare that inflation has stopped, and if price pressures abate, the Fed may lower interest rates this year.

• Thomas Barkin, the president of the Richmond Fed, stated that the current interest rate environment is sufficiently restrained to slow down the economy and return inflation to the goal range of 2%.

• According to CME’s FedWatch Tool, financial markets are currently pricing in over 50 basis points (bps) of rate reduction from the Fed this year, including a 65.7% chance of a rate decrease of at least 25 bps in September.

• This Friday will see the release of the preliminary University of Michigan Consumer Sentiment Index, which is predicted to decline from 77.2 in April to 76.0 in May.

• Israeli forces attacked the southernmost city in Gaza. Israel claimed the terms did not satisfy its expectations, even though Hamas accepted a ceasefire plan on Monday, according to the New York Times.

• The People’s Bank of China (PBoC) extended the duration of its successive gold acquisitions to 18 months in April by adding 60,000 troy ounces to its holdings.

Technical Analysis: Over the long run, the price of gold remains positive

During the day, the price of gold trades lower. Longer-term optimism for the yellow gold is still present, though, since XAU/USD is above the significant 100-day Exponential Moving Average (EMA) and sloping upward.

Since mid-April, the price of gold has been trapped in a declining trend channel in the short term. The 14-day Relative Strength Index (RSI), which stays below the 50 midline, supports the cautiously bearish outlook.

The initial objective on the downside for XAU/USD will be the psychological round figure of $2,300. If there is any further selling below this point, the lower limit of a channel with a declining trend will be visible, which is $2,260. A bearish break below the indicated level will lead to a low of $2,228 on April 1 and a round number of $2,200.

The immediate hurdle will appear on the upside close to the $2,232 high from May 6. The next obstacle is situated close to the intersection of the upper bound of a channel with a declining trend and the high of April 26 in the $2,350–$2,355 range. The $2,400 round mark, which is en route to an all-time high at $2,432, is another upward filter to keep an eye on.

US dollar exchange rate for this week

The US dollar’s (USD) percentage movement compared to a list of major currencies for this week is displayed in the table below. The US dollar outperformed the Japanese yen in this exchange.