Although the strength of the US dollar and global central banks wanting to tighten their monetary policy throughout 2022, the price of gold continued to move within its upward path with gains to the resistance level of 1981 dollars an ounce. This is the highest for the price of the yellow metal in a month, where it settled around the level of 1974 dollars an ounce at the beginning of trading this week. This confirms the strength of the upward trend. The US dollar was weak as US Treasury yields fell amid signs that inflation may have peaked. The European Central Bank kept its policy rates unchanged and reiterated that it intends to end asset purchases in the third quarter.
For his part, Federal Reserve Board member Christopher Waller said that the US central bank will continue its plan to raise interest rates to curb inflation, although the pace of price increases is likely to have peaked. Waller added that the US economy is strong enough to support higher rates, which would enable the Fed to cut rates without causing a recession.
On the economic side, data from the US Department of Commerce showed that US retail sales rose by 0.5% in March after rising by an upwardly revised 0.8% in February. Economists had expected retail sales to increase 0.6%, compared to the 0.3% originally reported for the previous month. A separate report from the Labor Department showed that first-time claims for US jobless benefits increased more than expected in the week ending April 9, rising to 185,000 claims, an increase of 18,000 from the previous week’s revised level of 167,000. Economists had expected jobless claims to rise Preliminary to reach 171,000 claims from 166,000 claims in the previous week.
The Labor Department also released a report showing that US import prices rose more than expected in March, as fuel import prices continued to rise. Meanwhile, preliminary data from the University of Michigan unexpectedly showed a significant improvement in US consumer confidence in April. The report showed that the US consumer confidence index rose to 65.7 in April from 59.4 in March. The sharp increase surprised economists who had expected the index to drop to 59.0.
The consumer confidence index rebounded from its lowest level since August 2011 amid an improvement in consumer expectations, with the expectations index rising to 64.1 in April from 54.3 in March.
According to gold technical analysis: In the near term and according to the performance on the hourly chart, it appears that the price of gold is trading within the formation of an ascending channel. This indicates a significant short-term bullish momentum in the market sentiment. Therefore, the bulls will look to extend the current gains towards $1,980 an ounce or higher to $1,988 an ounce. On the other hand, the bears will target potential downside profits at around $1,65 or lower at $1,56 an ounce.
In the long run, and according to the performance on the daily time frame, it appears that the price of gold rebounded recently to recover from the sharp decline. The yellow metal price has now resumed its previous ascending channel, which indicates a long-term bullish momentum. Therefore, the bulls will target long-term profits at around $2006 an ounce or higher at $2,050 an ounce. On the other hand, the bears will look to pounce on the long-term reversals around $1,920, or lower at $1,870 an ounce.