Gold price extended gains on Wednesday, rising by 0.7 percent to trade at $2,427 per ounce at the spot market. The commodity’s rise is propelled by expectations that US interest rate cut could potentially happen earlier than September, which has weighed down on the dollar. The US Personal Consumption Expenditure (PCE) Index figures set for release on Friday will shed more light on that possibility.
The US economy printed out mixed figures on Wednesday, with the S&P Manufacturing PMI missing the forecast figure and showing that manufacturing contracted in July. On the other hand, the services industry experienced growth, with the S&P Global Services PMI coming in at 56.0 against the forecast 54.7. The focus now turns to Thursday’s release of US GDP figures, which will shed light on the trajectory of the US economy and inject new volatility into the XAUUSD pair.
The momentum on gold price as per the RSI indicator on the 4-hour chart signals control by the buyers. This is supported by the MACD indicator, which is currently above the signal line. Notably, a previous downtrend was recently rejected at the $2400 psychological support mark. Therefore, the uptrend will likely continue if gold price stays above that mark.
Gold price will likely continue the upside if it stays above the $2420 pivot mark. However, the XAUUSD pair could encounter the first resistance at $2,430, but extended control by the buyers could break above that mark to send the price higher to $2,440. Conversely, a move below $2,420 will hand over control to the sellers. In that case, the first support could come at $2,413, but extended control, could breach that mark and invalidate the upside view. Also, it could result in a stronger downside momentum to take the price lower to the second support at $2,404.
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