Gold price recovered on Thursday, rising by 0.6 percent to trade at $2,313 per ounce in the spot market and up by 0.5 percent in the futures market to trade at 2,324. The recovery came following two successive session losses, as traders shifted their attention to US Initial Jobless Claims data for fresh perspectives into the dollar’s strength.
On Tuesday, FOMC member, Michelle Bowman stated that keeping the current US interest rates unchanged was probably the best strategy for putting a lid on inflation. However, she also stated that she was open to raising the rates, if only to bring inflation to the Fed’s target of 2 percent. Beyond the economic figures, fresh volatility could come the dollar’s way when US President Joe Biden and Former President Donald Trump take centre stage for the first Presidential Debate of the 2024 Elections. The two are locked in a tight race as per opinion polls, raising the stakes on the dollar.
Yields on US Treasury bonds were stable at 4.32 percent on the benchmark 10-year bonds, and that will likely put a lid on gains by gold price. Furthermore, investors will be looking at the US Initial Jobless Claims figures for new clues on the potential trajectory of gold prices. Set for release on Thursday, the figures have been on the rise for the last 4 consecutive sessions, and a fifth consecutive higher-than-expected reading could add to the pressure on the dollar.
The final US GDP readings for the first quarter of the year will be out, but the investors are likely to ignore. The same is likely to happen to the May Durable Goods Orders data set for release on Thursday. The biggest market mover will be the Personal Consumption Expenditure (PCE) scheduled for release on Friday. The figures are central to the Fed’s tracing inflation trajectory and has significant implications on interest rate decisions.
Technical analysis
The momentum on gold price currently signals control by the buyers, with the pivot at 2,313. The upside will likely continue if price action stays above that mark, and the first resistance is likely to come at 2,320. A break past that mark will strengthen the upward push, and could see another resistance encountered at 2324. Alternatively, a break below 2,313 will favour the sellers to take control, with the first support likely to be at 2,307. A break below that mark will invalidate the upward narrative and could lead to extended declines to test the psychological support at 2,300.
