Market Analysis
Gold prices are gaining momentum today as the US Dollar weakens. This shift comes after the latest Consumer Price Index (CPI) report revealed a slowdown in US inflation for April, leading investors to speculate on potential rate cuts by the US Federal Reserve later this year. Lower interest rates could bolster gold's appeal by reducing the cost of borrowing for investments in the precious metal.
Traders are keeping a close eye on a range of economic indicators today, including US Building Permits, Housing Starts, Initial Jobless Claims, the Philly Fed Manufacturing Index, and Industrial Production. Additionally, several Fed officials, including Barr, Harker, Mester, and Bostic, are scheduled to deliver speeches. However, any hawkish remarks from these officials could strengthen the US Dollar and limit gold's upward potential in the short term.
From a technical standpoint, gold prices continue to trend higher. The market has formed an ascending trend channel since early May, with the price currently holding above the 100-period Exponential Moving Average (EMA) on the four-hour chart. The Relative Strength Index (RSI) is in bullish territory, hovering around 72. Although the RSI indicates an overbought condition, suggesting the possibility of consolidation, the overall outlook remains positive.
Key resistance levels to watch include the upper boundary of the ascending trend channel and the psychological barrier of $2,400. A break above this level could pave the way for further gains toward the all-time high of $2,432 and beyond to the $2,500 mark.
Paraphrasing text from "FX Street" all rights reserved by the original author.