Gold Daily | Gold Stabilizes Amid Dollar Dip; Fed's Cautious Stance Pressures Prices, Eyes on US Data

【Latest Gold Price and Recent Trends】

The international gold price stabilized on Thursday at $3,739.22 after a slight dip in the dollar provided some support. Gold recently hit a record high of $3,790.82. Market focus now shifts to upcoming U.S. economic data and Federal Reserve comments for further guidance. The Fed's cautious stance has lowered market expectations for rate cuts this year, only factoring in a 43 basis points easing space, which is pressuring gold prices.

【Technical Analysis】

Initial support for gold is observed at $3,700, with potential further support at $3,650 if this level is breached. Resistance is expected at $3,750, and a break above the latest high of $3,790 could see prices target the $3,870 to $3,875 range, followed by $4,000. The Relative Strength Index (RSI) has fallen to around 72.5, indicating overbought conditions and suggesting caution for buyers.

【Market Sentiment and Economic Background】

The market is awaiting key U.S. economic data for further guidance on Federal Reserve policy. Recent cautious statements by Fed officials have led the market to lower expectations for rate cuts this year, now pricing in only 43 basis points of easing space, down from previous bets on two rate cuts. This shift has strengthened the dollar and exerted pressure on gold prices. Investors are now focused on the upcoming U.S. Personal Consumption Expenditures (PCE) price index, a preferred inflation measure by the Fed, with expectations of a 0.3% month-on-month rise and 2.7% year-on-year. Additionally, U.S. initial jobless claims data will provide insights into labor market conditions.

【Analyst Opinions】

Tastylive's Global Macro Director, Ilya Spivak, suggested that the rise in gold prices might indicate market expectations that the Fed will refocus on the labor market, allowing the U.S. economy to run hot. Furthermore, GoldSilver Central's Brian Lan believes that unless inflation data is exceptionally high, it won't significantly impact gold prices. He maintains a bullish long-term trend for gold from a quantitative analysis perspective. Valeria Bednarik from FXStreet adds that while the daily gold trend seems unchanged, buyers need to be cautious due to the overbought signals. She highlights that the 14-day Relative Strength Index has slightly decreased to around 72.50. As geopolitical tensions rise and the market anticipates dovish Federal Reserve actions, gold is expected to remain above $3,750 in the short term. State Street's Marvin Loh suggests maintaining long positions in gold and short positions in the oil market, given the current economic uncertainties and central bank policies.