Spot Gold fell throughout the first half of the day, extending its intraday slump to a fresh weekly low of $3,267.01. The XAU/USD pair traded on sentiment, falling after the release of tepid United States (US) data.
On the one hand, the April ADP Employment Change report showed that the private sector added measly 62K new job positions, much worse than the 108K expected, while below the previous 147K. On the other hand, the preliminary estimate of the US Q1 Gross Domestic Product (GDP) also missed expectations, as the economy contracted at an annualized pace of 0.3% against the anticipated 0.4% expansion, and sharply down from the previous 2.4%.
Wall Street fell as an immediate reaction to the news, with the US Dollar (USD) reacting unevenly across the FX board, gaining ground against commodity-linked currencies and the bright metal.
However, stocks quickly changed course, and so did XAU/USD, as the US March Personal Consumption Expenditures (PCE) Price Index brought some optimism. PCE inflation was up 0.5% on a monthly basis and 2.3% from a year earlier, slightly above expectations yet shrinking from the February levels. At the time being, US indexes remain in the red, but are well off early lows. While the USD came under selling pressure.
The upcoming Asian session will bring the Bank of Japan’s (BoJ) monetary policy decision. Japanese officials are likely to keep interest rates on hold amid trade-war-related uncertainties. The Japanese yen (JPY) is likely to turn south with the expected decision and a suspected downgrade to economic prospects, which could result in an extra near-term USD impulse.
XAU/USD short-term technical outlook
The XAU/USD pair recovered the $3,300 mark and currently hovers around $3,310, with the upside limited. In the daily chart, the pair trades above all its moving averages, with a bullish 20 Simple Moving Average (SMA) providing relevant dynamic support at around $3,230. The 100 and 200 SMAs advance below it, while technical indicators extend their slides within positive levels, suggesting buyers remain sidelined.
In the near term, and according to the 4-hour chart, the XAU/USD pair is neutral. The bright metal hovers around a directionless 20 SMA, although the longer moving averages advance below the mentioned intraday low, suggesting a limited bearish potential. Finally, technical indicators turned flat at around their midlines, failing to provide clear directional clues.
Support levels: 3,301.40 3,288.70 3,267.00
Resistance levels: 3,327.90 3,344.60 3,358.10
Source: Fxstreet
