On Thursday (April 25), the price of gold rose slightly due to the weakening of the US dollar. Spot gold rose 0.8% to close at $2,333.79 an ounce.
Source: Yi Huitong
On Thursday, after the US released mixed economic data, the US dollar fell slightly to give gold a certain boost and remained stable. The US Department of Commerce reported on Thursday that the US gross domestic product (GDP) grew at an annual rate of 1.6% month-on-month from January to March, lower than the 2.4% expected by economists interviewed by Reuters. The report also showed that the core personal consumption expenditure (PCE) price index rose 3.7% in the first quarter, and is expected to rise 3.4%. The higher than expected inflation index made Friday's March PCE price index data more interesting than usual. Because the PCE price index and the core PCE price index, which excludes food and energy price factors, are all inflation indicators favored by the Federal Reserve. If the US inflation rate remains stubbornly above the Federal Reserve's target level of 2%, then the expected probability that the US will cut interest rates in September will probably be greatly reduced. After the data was released, the CME (CME) FedWatch tool showed that the US interest rate futures market believes the probability that the Fed will cut interest rates in September is 58%, down from 70% late Wednesday. US bond yields rose after economic data showed signs of stubborn inflation, while continuing to dampen hopes that the Federal Reserve will cut interest rates soon. Therefore, although gold rose on the same day, the increase was slight, indicating that investors are still afraid of the March PCE price index to be announced on Friday. It is expected that Friday's response to the strength or weakness of inflation data will cause large fluctuations in the gold market.
On a technical level, on the daily level chart, the gold price trend is still trading above its 50-day moving average, which converges with the key medium-term key support area of $2,260 /$2,210 per ounce. Furthermore, the Daily Relative Strength Index (RSI) momentum indicator remained above the key equilibrium support level around 50 after exiting the overbought region, which indicates that the medium-term upward trend that began with the low of February 14, 2024 can still be maintained for the time being. On the other hand, if it falls below the lower limit of the key medium-term key support area of $2,210 per ounce, the corrective decline that occurred during its main uptrend phase will extend, thus exposing the long-term key support area of $2075-2,035 per ounce (which is also where the 200-day moving average) is within the target range. To determine the future direction of gold, we still need to pay attention to the March PCE price index results from the US on Friday evening.
Bank of China Guangdong Branch Wang Gang
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