- Gold rises after a sharp correction on a quiet day.
- XAU/USD found support above the 20-day SMA.
- US Dollar falls across the board ending a two-day rally.
Gold price rose $2,011/oz after the beginning of the American session, reaching a fresh daily high. The yellow metal remains near the high, supported by a weaker US Dollar.
Dollar down, ends 2-day rally
The US Dollar Index is falling by 0.30%, back under 102.00 while US Treasury yields are little changed. Economic data from the US came in mixed. Housing Starts declined to 1.42 million in March, above the 1.4 million markets consensus, but Building Permits fell to 1.41 million against the consensus of 1.5 million.
On a quiet session, recently, XAU/USD spiked down to $1,991 and then rebounded to the $2,010 area where it is trading. It is moving with a bullish intraday bias, still within Monday’s price range.
Federal Reserve expectations are little change. Markets participants continue to see a rate hike in May as the most likely scenario and one rate cut before year-end as possible. The rally in Gold lost momentum during the last days as investors pared bets for deep rate cuts.
In the daily chart, Gold found support above the 20-period Simple Moving Average (SMA). The trend is still up. Above $2,025, more gains seem likely, and while below, a consolidation between that area and the 20-SMA could take place.
A daily close below $1,990 should keep the door open to an extension of the retreat with key support levels seen at $1,975 and $1,955.