The precious metal commodity continued its fall for a third day in a row since last Tuesday and hit fresh weekly lows after economic data from the United States gave a boost to the US Treasury and the USD.
This will affect market expectations for a rate cut by the Federal Reserve (Fed), which is expected to ease by 27 basis points by the end of 2024.
Meanwhile, the price of gold is now at $2,333.09 which is a moderate recovery of 0.18% since it opened in the Asian trading session this morning.
US business activity remained positive as the final May reading of the Manufacturing and Services PMI exceeded market target estimates.
The US Bureau of Labor Statistics (BLS) showed that the number of Americans in the unemployment figures was slightly lower than the estimate and less than the previous reading. It still shows strengthening in the labor market.
This report also increased the advantage for the US Dollar Index (DXY) up 0.18% and back above 105.00 points after nearly two weeks of frantically below that level.
Minutes of the Fed meeting released on Wednesday show that some officials are prepared to raise rates if inflation remains stubborn and prevent gold from rising further.
Previously, the high jump for the price of gold was due to the purchase support by the central banks and the conflict of western countries' sanctions on Russia after its invasion of Ukraine.
From a technical point of view, gold's position is still at its highest peak despite recording high losses recently. Short-term momentum has turned negative with the Relative Strength Index (RSI) falling below the mid-50 line due to price correction and selling activity.
The market is targeting lower support at the May 13 low at $2,332 and the May 8 low at $2,303. If it is still lower, the 50-day SMA at $2,307 serves as the lowest support.
If there is a rebound, the buy target will be pegged at the $2,350 to $2,400 area. If the buying activity remains strong, the market extends the resistance level to the ATH position at $2,450.
