Gold price has attempted a downside break of the consolidation formed above $1,960.00 amid a recovery in the USD Index.
The expectations of a temporary pause in the policy-tightening spell by the Fed have soared due to weak US Services PMI.
Gold price is consolidating in a range of $1,932-1,985 for the past three weeks.
Gold price (XAU/USD) has displayed a sharp drop to near $1,960.00 in the European session. The precious metal is trying to come out of the woods. A minor sell-off in the Gold price has been propelled by a recovery extension in the US Dollar Index (DXY).
S&P500 futures have carry-forwarded nominal gains added in Asia to the London session. The market mood is quite cheerful as investors are anticipating that the Federal Reserve (Fed) is going to consider a neutral interest rate policy stance thoroughly for June’s monetary policy.
The expectations of a temporary pause in the policy-tightening spell by the Fed have soared after the United States Services PMI, reported by the ISM agency, hardly managed to dodge contraction. The economic data was marginally above the 50.0 threshold. Subdued service sector and contracting factory activities are pushing the United States economy aggressively toward a recession.
The US Dollar Index has rebounded to near 104.25 despite the street is anticipating that divergence in Fed’s interest rate policy with other global central banks will drop as the former is likely to keep rates steady while others are preparing for a fresh interest rate hike. The yields offered on 10-year US government bonds have also rebounded marginally above 3.66%.
Gold technical analysis
Gold price is consolidating in a range of $1,932-1,985 for the past three weeks on a four-hour. The precious metal is struggling in delivering a decisive move amid an absence of a potential trigger. Broadly, horizontal support is plotted from March 15 high at $1,937.39. The magical 200-period Exponential Moving Average (EMA) at $1,975.47 is acting as a strong barrier for the Gold bulls.
An oscillation in the 40.00-60.00 territory by the Relative Strength Index (RSI) (14) indicates a non-directional performance
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