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Gold Price News and Analysis: The Downside Prevails Ahead of Key US Data

Gold prices fell on Thursday as buyers held their breath for US macroeconomic data. Spot gold (-0.20%) traded at $2170 per ounce while futures gold (-0.30%) went for $2174 as of 10.24 UTC. The precious metal’s hot rally came to a halt on Monday, and the extent of the current consolidation largely depends on US retail sales data, PPI and unemployment data set for release on Thursday.

The US Department of Labor will release the latest initial jobless claims figures during the New York session, and the market consensus forecasts a marginal increase from 217k to 218k. The US labour market has staggered in recent weeks and the dollar needs a stronger show to find support for the upside.

Also, the Census Bureau and Department of Labor will release two key readings: the Core Retail Sales and Producer Price Index readings for February. The Core Retail Sales data is used to gauge consumer spending and is expected to come in at 0.5% from January’s -0.6%. On the other hand, the PPI, which is a barometer for overall inflation, is expected to remain unchanged at 0.3%. The dollar recently gained some strength from CPI data, which showed that core inflation rose in February. A confirmation of the same by the PPI data would dent growing consensus of a June interest rate cut by the Fed, and provide tailwinds for the dollar.

Meanwhile, gold prices face downward pressure as US Treasury yields rise to 4.20% territory from 4.00% earlier in the week. This will favour the downside for the precious metal in the intervening period to the US macroeconomic data releases. Nonetheless, gold could still get tailwinds from China if the country’s house prices data show deepening trouble in the country’s property sector.

Technical analysis

Gold price is currently bearish-leaning and we are likely to witness the downside for as long as the sellers keep the price below the 2176.00 pivot mark. An extension of control by the sellers could see them breach under the support at 2161.00 and potentially test 2156.00. On the other hand, the momentum will swing towards the buyers if they keep the price above the pivot level. An extended control will likely see them break above the 2181.00 resistance level, setting them on course to test the next resistance at 2187.00.

Gold price on a 30-minute chart