Gold prices finished Tuesday higher, extending their bounce from three-month lows as the US dollar pulled back from nearly two-year highs. However, the yellow metal is trading sideways on Wednesday.
Sameer Samana: Gold in an uptrend
Spot gold prices were flat at $1,816 at press time, while US gold futures were trading at $1,815, down 0.2%. Sameer Samana, senior global market strategist at the Wells Fargo Investment Institute, comments in a weekly client note:
Gold is in an uptrend. Support is located at the 200-day moving average of $1,835, followed by a recent low of $1,787. Resistance will likely hold at the 50-day moving average of $1,933, then the key threshold of $2,000 and the recent high of $2,051.
Lukman Otunuga: The precious metal is definitely not out of the woods yet
The dollar has been searching for a gauge for gold in recent weeks. As we reported on Cryptokoin.com , the ICE US Dollar Index (DXY) hit its highest level in nearly 20 years as the Federal Reserve launched an aggressive cycle of rate hikes to contain inflation. A stronger dollar is viewed negatively for commodities priced in the currency, making them more expensive for users of other currencies. Lukman Otunuga, senior research analyst at FXTM, underlines the following in a note:
The weak dollar and the slight decline in Treasury rates were seen as the main factors triggering the upward movement. Regardless of recent gains, the precious metal has certainly not yet come out of the woods.
Powell wants to see clear and convincing evidence of slowing inflation
US retail sales data released Tuesday, surveyed by The Wall Street Journal It pointed to a solid economic base, rising 0.9% in April, slightly below the 1% advance estimates of the economists participating. Industrial production rose 1.1% in April, according to the Fed, beating expectations for a 0.5% increase.
After gold prices stabilized for the day, Fed Chairman Jerome Powell said in the Wall Street Journal’s Future of Everything event that he would like to see “clear and convincing evidence” that inflation is slowing before the central bank slows its planned rate hike. .
