Gold price has continued to find support in the weakening US dollar; giving the bulls an opportunity to boost the precious metal back above the crucial zone of $2,000 per ounce. In fact, it momentarily rose past that level on Tuesday before pulling back. Crucial economic data in the course of the week will further impact the market.
Amid the persistent recession concerns, expectations that the Fed will approve interest rate cuts later in the year has been one of the influential drivers. Besides, in the upcoming central banks meetings, analysts expect a more hawkish stance from ECB compared to the Fed. The latter will likely increase rates by 25 basis points while a hike of 50 basis points remains on the table for ECB.
Economic data set for release over the course of the week will further be helpful in assessing the overall health of the US and global economies. In particular, the US consumer confidence numbers are due later on Tuesday. After the improvement seen in March, analysts expect a slight decline from the prior month’s 104.2 to 104.0.
On the one hand, a lower-than-expected figure may exert further pressure on the US dollar while boosting gold price. Nonetheless, improved consumer confidence may not have a significant impact on the precious metal as it is of low relevance to the direction of the Fed’s interest rates.
Even so, economic data of greater significance to the Fed’s path are scheduled for later in the week. Figures on core durable goods orders are due on Wednesday while preliminary data on US GDP for the year’s first quarter are slated for Thursday. Besides, the Fed’s preferred gauge of inflation – PCE price index – is set for release on Friday.
Gold price prediction
Gold price extended its previous gains in early Tuesday trade as the bulls strive to regain their position above the psychological level of 2,000. As at the time of writing, it was at 1,992.89; up by 0.21%. A look at its daily chart shows that the precious metal continues to trade above the 25 and 50-day EMAs.
For as long as the commodity remains above the crucial support level of 1,950, which is along the 50-day EMA, the bulls will be in control of the market. In the immediate term, it may hover around the 25-day EMA as it finds support at 1,977.87. On the upside, the resistance levels of 2,0005.78 and 2,015.41 will be worth watching in the ensuing sessions.