XAUUSD: Gold Price Extends Losses As Market Awaits Key US Data

Summary:
• Gold price lacks upside propulsion as the market pays greater attention to US data amid an escalation of conflict in the Middle East.

Gold prices were down by 0.3 percent in the intraday session on Thursday, as the market positioned itself for the release of key US economic data. XAUUSD traded at $2,336 per ounce at the spot market, and touched an intra-day low of $2,322.66, the lowest point in two weeks.  The downward momentum is likely to persist, as yields on US treasury bonds return to the ascending lane on hawkish Fed comments. Returns on benchmark 10-year bonds are hovering near the 4.600 mark as of this writing.

The final GDP readings for the first quarter of 2024 will be out on Thursday, and the market forecasts the figure to come in at 1.6 percent, as captured in the preliminary reading released in April. A deviation from the figure will inject fresh volatility into the XAUUSD pair, especially in view of recent soft US macroeconomic data.

Beyond the GDP figures, the market could be moved by the US Personal Consumption Expenditure (PCE) data for April, set for release on Friday. That will provide guidance on the trajectory of inflation, which has been central to the Fed’s decision to keep high interest rates beyond June. In the intervening period, Initial Jobless Claims figures will provide some propulsion in Thursday’s session.

However, gold could yet get some support from the geopolitical front as Israel’s offensive in Rafah seems to be getting more intense. Latest reports indicate that 21 people died in Rafah, in the last 24 hours, with the overall death toll in Gaza put at 36. Also, the Israeli army has taken control of the Philadelphi Corridor between Gaza and Egypt, in what some analysts fear could lead to an escalation.

Technical analysis

XAUUSD price is on a downward-facing momentum, and the trajectory will likely continue if resistance persists at 2,340.78. That will likely see the establishment of the first support at 2,333.43, beyond which the price could go on to test 2,328.70.  Conversely, a move above 2,340.78 will favour the buyers to take control, with the momentum likely to meet the next resistance at 2,345.05. Furthermore, extended control by the buyers at that point will break the resistance, and potentially build the momentum to test 2,350.90.