- Gold price has faced selling pressure around $1,948.00 as the Fed could raise interest rates further.
- US President Joe Biden is scheduled to deliver remarks on the budget agreement at 10:25 GMT.
- Gold price has turned imbalance after a breakdown of the consolidation formed in a range of $1,952-1,985.
Gold price (XAU/USD) is displaying topsy-turvy moves after facing stiff resistance around $1,948.00 post a less-confident pullback. The precious metal is expected to remain on edge as the street has changed its anticipation to a hawkish stance from a neutral mood by the Federal Reserve (Fed) for June’s monetary policy meeting.
S&P500 futures have added significant gains in the early Tokyo session on hopes that US President Joe Biden will soon reach a bipartisan with Republicans for raising the US debt-ceiling limit. US President Joe Biden is scheduled to deliver remarks on the budget agreement at 10:25 GMT.
Gold price is expected to escalate its downfall as a rebound in households’ spending has strengthened fear of more interest rates by the Fed. Friday’s United States Personal Consumption Expenditure (PCE) Price Index (April) data showed persistence in inflation as individuals are still spending significantly. Also, US Durable Goods Orders data expanded by 1.1% vs. a contraction of 1.0% as expected, which indicates resilience in US economic outlook.
Investors should note that the US markets will remain closed on Monday on account of Memorial Day.
The US Dollar Index (DXY) is making efforts for resuming the upside journey after a corrective move to near 104.23. Meanwhile, Chicago Fed President Austan Goolsbee preferred to remain silent on commenting on his decision for the June meeting as the central bank will get a lot of important data between now and then. He further added the full impact of central bank rate increases to date had yet to be felt.
Gold technical analysis
Gold price has turned imbalance after a breakdown of the consolidation formed in a range of $1,952-1,985 on the daily scale. The precious metal has shifted into bearish territory and is expected to find immediate support near March 22 low at $1,934.34. After a breakdown of the March 22 low, the Gold price would get exposed to February 09 high at $1,890.27.
The 20-period Exponential Moving Average (EMA) at $1,975.00 is acting as a barricade for the Gold bulls.
The Relative Strength Index (RSI) (14) has slipped below 40.00, showing no signs of divergence and an absence of evidence of oversold situation supports weakness ahead.
Gold daily chart
