The rebound in spot gold may not hold as investors await U.S. GDP and the Fed's preferred inflation gauge, the PCE price index
The precious yellow metal gains momentum as the U.S. Dollar index (DXY) retreats from its 5-month peak to 105.68.
Speculation arises from U.S. data suggesting the Federal Reserve might consider rate cuts earlier, shifting from September to August with talk of even possibilities in June.
Fed policymakers are in a media blackout before their May 1 policy meeting.
Softer U.S. PMI data reveals a slight contraction in manufacturing activity to 49.9, down from March's 51.9. Services and Composite PMIs remain in expansionary territory but decline from 51.7 to 50.9 and 52.1 to 50.9, respectively.
Investors await crucial U.S. economic data, including first-quarter GDP and the release of the U.S. Federal Reserve's preferred measure of inflation.
The Personal Consumption Expenditure (PCE) report on Friday is expected to show a 0.4% increase.
From a technical standpoint, the Relative Strength Index (RSI) 3-day 'lookback' indicator and the Moving Average Convergence Divergence (MACD) is negative, while the ADX (trend) indicator suggests a ranging market.
Given the high volatility, bears will likely continue weighing on the market, warranting further evaluation as the market declines, which could lead to a region of $2,250-70. Reassess from there.
Conversely, upward momentum should find a bearish ambush from $2,325 to $2,333-37.
Daily Chart Spot Gold
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