As discussed in last week’s report, Spot Gold (XAU/USD) has remained in the same well-defined range, with prices now convecting near the $3,325 area. The yellow metal has been on a rapid rise and fall lately. It is trading an undecided 20 Simple Moving Average (SMA) that indicates erratic movement on the 4-hour chart. The market is experiencing a lack of confidence. Gold prices and investor sentiment have been impacted a lot by recent economic data reported from the United States.
The US Dollar fell sharply against all its currency counterparts during the American session on the heels of disappointing economic releases. Consumer Confidence, as measured by the Conference Board, plunged to 86 in April, the lowest reading since October 2021. America’s job openings plummeted to 7.19 million at the end of March. That’s a decrease from 7.48 million last month. These three issues weighed heavily on XAU/USD. Once that disappointing data was released, the price fell sharply.
Technical analysis of XAU/USD indicates that while the 100 and 200 SMAs are trending higher, remaining over $100 below the current trading level, there is a lack of momentum driving prices upwards. For now, market participants are a bit gun-shy and waiting for more key data releases to decide what direction to throw their weight behind. Two key reports on the economic situation are just around the corner. On Wednesday, the advance estimate of Q1 GDP is forecasted to reflect an annualized 0.4% growth rate, a significant decline from the 2.4% growth seen in Q4 2024.
Market participants will be keeping a close watch on inflation data releases from Australia and Germany during the week. They are watching the US data closely. The Eurozone, Canada, and the US will release their respective Gross Domestic Product (GDP) figures in the coming days, potentially impacting gold prices further. With the macroeconomic calendar packed full of first-tier events, there is a good chance that traders are gun-shy until more clarity is available.
During the first half of trading, XAU/USD lost some ground amid near-term demand for the US Dollar. Still, buyers have been eager to step in near the $3,300 mark to help support prices. On the downside, immediate support levels for XAU/USD are seen at 3,314.50, 3,301.40, and 3,288.70. On the upper end, watch resistance levels at 3,344.60, 3,358.10, and 3,375.00.