Gold fell in the mid-North American session on Thursday below $2,390 as US Treasury yields rebounded and gave bullish support to the USD.
The US CPI report last Wednesday helped gold to soar higher near $2,400 but on Thursday the market sentiment was somewhat confused and dragged it down due to profit taking activity at the end of the week.
Meanwhile, the price of gold is now placed at $2,377.89, which is a slight increase of 0.05% since it opened at the beginning of the trading session this morning.
Wall Street also continued to trade near record highs and hurt the appetite for safe-haven assets like gold to climb higher.
US economic data continued to drive gold prices after the number of Americans in unemployment rose above estimates not far from the previous reading.
Other reports such as construction permits were also lower and housing increased in April compared to March although not on forecast.
Richmond Fed President Thomas Barkin acknowledged that inflation is easing while stressing that it will take longer to reach the Fed's target of 2%.
Cleveland Fed President Loretta Mester expressed approval of the latest CPI, saying that current policy is appropriate as the Fed is still evaluating upcoming economic data.
From a technical point of view, the gold trend is still showing bullish signs despite retreating below the $2,380 area after strong 'buy' momentum as depicted in the Relative Strength Index (RSI) indicator.
If it falls to the lows of $2,332 on May 13, it is a deeper price correction.
In this defensive scenario, the market is targeting support at the May 8 low at $2,303 followed by the 50-day Simple Moving Average (SMA) at $2,284.
If there is a reversal, the high target will reclaim the $2,400 area as the next profit extension and chase the previous ATH at $2,431.
