Market Analysis

Gold prices (XAU/USD) saw modest gains on Friday, supported by a weaker US dollar (USD) and lower US yields. Traders increasingly bet on a potential interest rate cut by the Federal Reserve (Fed) this year following weaker-than-expected US GDP data. Additionally, geopolitical tensions in the Middle East bolstered gold's appeal as a traditional safe-haven asset.

Later in the day, market focus turned to the US April Core Personal Consumption Expenditures Price Index (Core PCE), a key inflation gauge for the Fed. Expectations were for a 0.3% month-on-month increase and a 2.8% year-on-year rise in April. Stronger-than-anticipated inflation data could support the USD and limit upside potential for gold prices.

From a technical standpoint, gold remained bullish on the daily chart, staying above the critical 100-day Exponential Moving Average (EMA). The 14-day Relative Strength Index (RSI), hovering near the 50-midline, indicated a neutral stance, suggesting possible consolidation ahead.

Near-term resistance for gold was noted at the upper boundary of the Bollinger Band around $2,425, with further upside potentially testing the all-time high near $2,450 and the psychological barrier of $2,500. Conversely, support was seen around the $2,290–$2,300 range, marked by the lower Bollinger Band and a key price level. A break below this zone could lead gold lower towards the 100-day EMA support at $2,230.

Paraphrasing text from "FX Street" all rights reserved by the original author.