Gold price has recouped the year’s losses by trading above the psychological level of 1,900 for the first time since January. The weakening US dollar has boosted the rallying. On Tuesday, new home sales and consumer confidence numbers exerted additional pressure on the greenback. New home sales were at 863,000 in April compared to the forecasted 970,000 and 917,000 in March.
At the same time, the ongoing inflation jitters caused consumer confidence to fall to 117.2. The figure is lower than the expected 119.2 and 117.5. Subsequently, the dollar index dropped by 0.06% to 89.61.
Gold price is also reacting to the decline in US bond yields. The benchmark 10-year Treasury yields are on a rebound at 1.57. However, it is still significantly lower than the 1.69 level it hit a week ago. Low yields increase the precious metal’s safe-haven appeal.
Gold Price Technical Outlook
Gold price is trading above 1,900 for the first time since 7th January. At its current 1905.89, the precious metal has recouped the year’s losses. Notably, it has only been in the red once over the past ten daily sessions. On a four-hour chart, it is trading above the 25 and 50-day exponential moving averages with an RSI of 70.
I expect gold price to pull back to the psychological 1,900 before moving back up. The bears may manage to push it further down at 1,890, after which it will surge towards its next target at 1,920. However, a move below 1,890 will invalidate this thesis.
Gold Price Chart
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