GOLD moves sideways ahead of Fed's favorite inflation data
Updated
During the trading session on the Asian market on Friday (May 31), spot gold decreased slightly, currently at 2,339 USD/ounce. On this trading day, investors will receive the most important economic data of the week, US PCE inflation data, which is expected to stimulate the market trend.
Gold prices recovered some of Wednesday's losses on Thursday after the US gross domestic product (GDP) showed the economy was slowing. US GDP data has revived hopes that the Federal Reserve may cut interest rates later this year.
Data released by the US Department of Commerce on Thursday showed that the US quarterly real GDP rate in the first quarter was 1.3%, below the previous baseline value of 1.3%. .6%, reflecting lower-than-expected consumer spending.
Personal spending, the main growth driver of the US economy, increased by 2.0%, compared to the previous initial value of 2.5%.
The U.S. Department of Labor reported Thursday that 219,000 people filed for unemployment benefits in the week ended May 25, compared with expectations of 218,000 and a previous figure of 215,000.
U.S. economic growth was slower than in the fourth quarter of last year, suggesting that higher borrowing costs set by the Federal Reserve are having an impact on the economy. Meanwhile, the US Department of Labor revealed that the number of people applying for unemployment benefits is increasing. These two factors have weakened the Dollar in the short term.
Today (Friday), US personal consumption expenditure (PCE) price data for April will be released.
Surveys show that the US PCE price index in April is expected to increase 0.3% monthly and increase 2.7% year-on-year.
In terms of more important core data, surveys show that the US core PCE price index for April is expected to increase 0.3% month-on-month and 2.8% year-on-year. .
As the Fed's preferred measure of inflation, year-over-year changes in the core PCE price index have a larger impact on policymakers which in turn impacts the underlying trend of gold prices.
Analysis of technical prospects for
XAUUSD
Technically, gold is still mainly moving sideways due to the lack of a fundamental impact to create a surge, but overall, it has the conditions to decrease in price due to price activity below EMA21 and an uptrend. in the medium term was broken before.
Although the recovery from the technical level of 2,324 USD was noticeable to readers in yesterday's edition, it is also limited by the EMA21, and for gold to be eligible to continue its recovery, it needs to at least reach Price activity is above the 21-day moving average (EMA21).
On the other hand, gold is likely to fall more towards $2,305 – $2,300 once $2,324 is broken below.
During the day, the technical trend of gold price leans more towards the possibility of price decline with notable levels being listed as follows.
Support: 2,324 – 2,305 – 2,300USD
Resistance: 2,345 – 2,353USD
🪙SELL XAUUSD | 2376 - 2374
⚰️SL: 2380
⬆️TP1: 2369
⬆️TP2: 2364
🪙BUY XAUUSD | 2306 - 2308
⚰️SL: 2301
⬆️TP1: 2313
⬆️TP2: 2318
Gold prices recovered some of Wednesday's losses on Thursday after the US gross domestic product (GDP) showed the economy was slowing. US GDP data has revived hopes that the Federal Reserve may cut interest rates later this year.
Data released by the US Department of Commerce on Thursday showed that the US quarterly real GDP rate in the first quarter was 1.3%, below the previous baseline value of 1.3%. .6%, reflecting lower-than-expected consumer spending.
Personal spending, the main growth driver of the US economy, increased by 2.0%, compared to the previous initial value of 2.5%.
The U.S. Department of Labor reported Thursday that 219,000 people filed for unemployment benefits in the week ended May 25, compared with expectations of 218,000 and a previous figure of 215,000.
U.S. economic growth was slower than in the fourth quarter of last year, suggesting that higher borrowing costs set by the Federal Reserve are having an impact on the economy. Meanwhile, the US Department of Labor revealed that the number of people applying for unemployment benefits is increasing. These two factors have weakened the Dollar in the short term.
Today (Friday), US personal consumption expenditure (PCE) price data for April will be released.
Surveys show that the US PCE price index in April is expected to increase 0.3% monthly and increase 2.7% year-on-year.
In terms of more important core data, surveys show that the US core PCE price index for April is expected to increase 0.3% month-on-month and 2.8% year-on-year. .
As the Fed's preferred measure of inflation, year-over-year changes in the core PCE price index have a larger impact on policymakers which in turn impacts the underlying trend of gold prices.
Analysis of technical prospects for
XAUUSD Technically, gold is still mainly moving sideways due to the lack of a fundamental impact to create a surge, but overall, it has the conditions to decrease in price due to price activity below EMA21 and an uptrend. in the medium term was broken before.
Although the recovery from the technical level of 2,324 USD was noticeable to readers in yesterday's edition, it is also limited by the EMA21, and for gold to be eligible to continue its recovery, it needs to at least reach Price activity is above the 21-day moving average (EMA21).
On the other hand, gold is likely to fall more towards $2,305 – $2,300 once $2,324 is broken below.
During the day, the technical trend of gold price leans more towards the possibility of price decline with notable levels being listed as follows.
Support: 2,324 – 2,305 – 2,300USD
Resistance: 2,345 – 2,353USD
🪙SELL XAUUSD | 2376 - 2374
⚰️SL: 2380
⬆️TP1: 2369
⬆️TP2: 2364
🪙BUY XAUUSD | 2306 - 2308
⚰️SL: 2301
⬆️TP1: 2313
⬆️TP2: 2318
Note
Note
- DXY has remained in a sideways range of 104.00-105.00 for the past two weeks. The index has not yet shown a potential future direction while still maintaining a sideways momentum.- If DXY breaks above the 105.00 level, the index could retest the 106.00 resistance level.
- On the contrary, DXY could return to around 104.00, and if broken, could confirm the downtrend.
Note
- The second estimated US GDP growth rate (Q1) reached 1.3% on a quarterly annualized basis (QoQ), indicating that the economy is still growing, albeit a bit slower.- Meanwhile, markets will be closely watching tonight's Personal Expenditures Price Index (PCE) figures, which could shape their future expectations of the Fed's policy interest rate.
- However, the Fed still gave mixed signals, with some officials issuing tougher statements (hawkish) and others more dovish (dovish).
Note
Opening the first trading session of the week (June 3, Vietnam time), the world gold price traded at 2,333 USD/ounce, an increase of 6 USD/ounce compared to the closing session of the week.Note
Gold prices decreased slightly by 0.25% in the week from May 27 to 31 and extended the decline for the second consecutive week, in line with other commodities as the market became less optimistic about the possibility of the US cutting interest rates. interest rate multiple times this year due to persistently high inflation.Note
- Gold stabilized at about 2,325 USD/troy ounce (-0.28%). Silver closed at around $30.40 per troy ounce (+0.17%).Note
ISM data have not been able to breathe new life into a series of poor data in the US that put pressure on the USD, and the greenback continues to weaken on a large scale due to falling yields. While orders/inventories continue to weaken, it can also be said that detailed data are not as tight as the "stagflation" speculations after a series of reports over the past few months.Note
On the daily chart time frame, gold (XAUUSD) is approaching the $2,300 support zone and forming a potential ascending price channel. The $2,300 support zone coincides with the lower boundary of the price channel and the 78.6% Fibonacci extension. If gold bounces above the $2,300 support zone, the price could rally towards the $2,400 resistance, coinciding with the recent swing top.Note
🟢Treasury yields rise as investors weigh economic data➡️U.S. Treasury yields were higher on Wednesday as investors considered the state of the economy amid a series of key data releases.
Note
This will mark the official end to the cycle of record rapid growth that began after the Covid-19 pandemic when inflation soared. However, investors' attention seems to have turned to what happens after the ECB's June interest rate cut.Note
Inflation reached 2% one quarter later than in March.Note
According to the Fed's statement on Thursday, the hypothetical scenario in the test simulates a severe global recession, stressing the residential and commercial real estate markets.Note
🔴Gold extends decline after US Nonfarm Payrolls beats expectationsGold (XAU/USD) falls all the way back to the $2,294s on Friday after the release of US Nonfarm Payrolls (NFP) data shows the US economy added 272K jobs in May when 185K had been expected. The result was also higher than the April figure which was revised down to 165K.
The US Bureau of Statistics (BLS) report showed a rise in Average Hourly Earnings of 4.1% YoY from a revised-up 4.0% in April, and beat estimates of 3.9%. The Unemployment Rate rose to 4.0%, however, when 3.9% had been forecast from 3.9% previously.
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