Baxia Markets
April 11, 2024

USD Strength Caps Gold's Rally; Traders Await US Data

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Gold prices experienced a brief decline on Thursday following the release of the US Consumer Price Index (CPI) data. While geopolitical tensions supported the safe-haven appeal of gold, a stronger US Dollar limited further gains.

Key economic events for the day include the European Central Bank (ECB) Interest Rate Decision, US Initial Jobless Claims, US Producer Price Index (PPI), and the Bank of Canada (BOC) Interest Rate announcement, with significant focus on the US Federal Open Market Committee (FOMC) meeting.

USD Strength Caps Gold's Rally; Traders Await US Data

Despite the US CPI-driven dip, gold remains near the lower end of its daily range, trading around $2,331-$2,332 during the European session. The hotter-than-expected US CPI report has raised speculations that the Federal Reserve (Fed) might postpone interest rate cuts. Additionally, minutes from the March FOMC meeting hint at prolonged higher interest rates, supporting the USD and acting as a headwind for gold.

While geopolitical concerns persist, including tensions in the Middle East, cautious sentiment prevails among investors. This sentiment, combined with technical indicators suggesting a bullish retracement, underscores the need for vigilance. Notably, the market eyes US economic data releases for short-term cues, particularly amidst the ongoing bullish retracement.

On the technical front, the market shows signs of a bullish retracement, reclaiming over 38.2% of the recent bullish swing. Key support is seen at the EMA 200, near the 61.8% retracement level. However, oscillators signal short-term bearish sentiment within a broader bullish context. A bounce and break above the upper Bollinger band could signal a continuation of the major bullish trend.

Key Takeaways:

  1. Gold prices dipped post-US CPI data, but geopolitical tensions provide support.
  2. USD strength limits gold's gains despite ongoing geopolitical concerns.
  3. Traders remain cautious as gold hovers near daily lows, awaiting US economic data.
  4. Technical analysis suggests a bullish retracement in gold, with key support at EMA 200.
  5. Market sentiment awaits US data releases for short-term direction amid the ongoing retracement.

Key Economic Releases to Watch Today

EUR,  ECB Interest Rate Decision

Forecast 4.50% vs Previous 4.50%

USD, Initial Jobless Claims

Forecast 216K vs Previous 221K


Forecast 0.3% vs Previous 0.6%



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