May 10

Gold price attracts some buyers despite hawkish Fedspeak

Gold price edges higher for the second consecutive day on Friday. Weak employment data bolstered the speculation that the weakening economy would force the Fed to cut rates.

Technical Overview

The gold price trades on a positive note on the day. The yellow metal keeps the bullish vibe unchanged as it holds above the key 100-day Exponential Moving Average (EMA) on the daily timeframe.

In the near term, XAU/USD breaks above a descending trend channel that formed in mid-April, with the 14-day Relative Strength Index (RSI) standing in bullish territory around 67.50, which supports the buyers for the time being.

If gold bulls step in at the $2,400 psychological mark, then yellow metal could see a rally to an all-time high near $2,432, en route to the $2,500 figure. On the flip side, the first downside target will emerge at the resistance-turned-support level at $2,340. Extended losses for gold price expose XAU/USD to a potential support level at the $2,300 round mark, followed by a low of May 2 at $2,281. 


Fundamental Overview

Gold price (XAU/USD) gains momentum on Friday despite the modest rebound in US Dollar (USD). The yellow metal edges higher as many economists expect a weakening labor market could prompt the Federal Reserve (Fed) to cut interest rates sooner than currently expected to stimulate economic growth. Furthermore, the renewed geopolitical concerns are likely to be a positive factor for gold’s value on the market. 

However, the hawkish US FED talks on the interest rate, and the stronger US dollar (USD) might weigh on gold price. Gold traders will keep an eye on the first reading of the US Michigan Consumer Sentiment Index for May, along with the speeches from the Fed’s Bowman, Goolsbee, and Barr. Next week, the US Consumer Price Index (CPI) report will be in the spotlight.