Gold price jumped at the beginning of the American session, rising from $1,995 to $2,009, reaching the highest level in six days and then pulled back to the $2,000 area. A weaker US Dollar and lower Treasury yields boosted XAU/USD.
Data from the US came in above expectation with Durable Goods Orders rising 3.2% in March, above the 0.8% of market consensus. Despite the upbeat numbers, the US Dollar weakened particularly against EUR, GBP and JPY.
The US 2-year Treasury yield is at 3.88%, the lowest level in three weeks while the 10-year stands at 3.90%. The US Dollar Index trades at 101.99 (weekly low), down 0.73% for the day.
The rally in XAU/USD is seen as vulnerable amid the lack of clear drivers. The chart is bullish but the price is unable to confirm a firm break of the current range. Volatility is set to remain elevated considering the incoming US data and next week’s FOMC meeting. On Thursday, the US will report the first estimate of Q1 GDP, including consumer inflation figures.
A consolidation above $2,005 would suggest more gains ahead, with the next strong resistance around $2,030. On the flip side, if the current retreat extends, support awaits at $1,990. The crucial level is $1,970.
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