Gold Trades Above Support

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Gold Trades Above Support

Gold (Xau/Usd) Trades Above $2300 Support

The prices of Gold (XAU/USD) are seen above the $2300 support level as Thursday's session is coming to a close. After the release of the BEA's report regarding the US GDP, an appreciation was seen in the greenback and bond yields. However, it appears that the Gold remains unfazed even after the positive US data.

According to the BEA report, the GDP price index increased by 3.1% during Q1 compared to the earlier 1.7% reading. This means the Federal Reserve (Fed) now has more reason to delay its campaign of rate cuts in 2024.

Dxy Hovers At 106.00

And if we look at the DXY, it has managed to cross the 106.00 handle while the 10-Y bond yields are hovering at 4.70%.

However, the core issue is the higher price index, which has once again raised fears that high-interest rates will not go anywhere soon. At the same time, GDP growth has shown a sharp decline which has raised some serious concerns about the health of the US economy.

According to some experts, the slowdown in GDP growth is not enough to enable the Fed to achieve a soft economic landing. In simple words, the Fed is trying to lower inflation without causing a recession. However, it appears that might not be possible at all as the high-interest rates have started to show their effect on the US economy.

Up ahead is the core PCE or 'Personal Consumption Expenditure Price Index' for the month of March. In terms of Gold (XAU/USD), this data will determine the market's next move.

For now, Gold (XAU/USD) is seen above the $2300 support while the 20 EMA is providing dynamic support at the $2314. This is a sign that the volatility has increased in the short-term as Gold traders await crucial US data.

If we look at the downside, the $2265 is an important support as it also considers the 3-week lows. Another thing which hints at a possible correction is that RSI has dipped under the 60 threshold. This signifies that the Gold (XAU/USD) bullish momentum is showing signs of weakness.

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