📉🌟 #XAUUSD #H4
Introduction
Gold prices saw a significant decline following the release of stronger-than-expected US economic data. The improved Manufacturing and Services PMI figures have bolstered market confidence in the US economy, resulting in a strengthened dollar and a selloff in gold. Despite recent disappointing performances in the US economy, last Friday’s data has shifted investor sentiment, leading them to move away from safe-haven assets like gold.
Impact of US Economic Data on Gold Prices
The latest economic data highlights a robust performance in the US manufacturing and services sectors. This positive outlook has encouraged investors to liquidate their gold positions and allocate capital towards riskier assets, anticipating continued economic growth. The correlation between economic performance and gold prices is evident as stronger economic indicators reduce the appeal of safe-haven assets.
Key Focus: Federal Reserve’s PCE Price Index
Investors are now turning their attention to the Federal Reserve’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) Price Index, which is set to be released this Friday. The PCE Price Index is a critical measure of inflation and consumer spending patterns. A higher-than-expected PCE could signal rising inflation, potentially influencing the Federal Reserve’s future monetary policy decisions and impacting gold prices.
Technical Analysis of Gold Prices
Gold prices are currently trading lower, testing key support levels. The Moving Average Convergence Divergence (MACD) indicator shows increasing bearish momentum. Meanwhile, the Relative Strength Index (RSI) is at 40, indicating that gold might extend its losses if it breaks below the current support level, given that the RSI remains below the midline.
Important Resistance and Support Levels
🛑 Resistance Levels:
- 2365.00
- 2410.00
⬇️ Support Levels:
- 2315.00
- 2290.00
These levels are crucial for traders to monitor as they could signal potential reversals or continuations in gold price movements.
Conclusion
As we await this week’s economic data releases, particularly the PCE Price Index, traders should stay informed on market reactions and adjust their strategies accordingly. Monitoring key technical levels and understanding the impact of economic indicators on gold prices will be essential for making informed trading decisions.
