Gold price (XAU) trades close to a more than three-week low around $2,285 in Wednesday’s European session. The precious metal weakens as the US Dollar and bond yields strengthen amid firm speculation that the Federal Reserve (Fed) will opt for maintaining a restrictive interest rate environment for a longer period due to inflation remaining persistently higher than expected in the first quarter of the year. Pexels In this context, 10-year US Treasury yields move higher to 4.69%. The US Dollar Index (DXY), which tracks the US Dollar’s value against six major currencies and is negatively correlated to the Gold price, jumps to a two-week high of around 106.50. The US Dollar remained on the backfoot last week after weak growth in Q1 Gross Domestic Product (GDP) raised concerns over the country’s economic outlook. However, it bounced back strongly on Tuesday after the US Bureau of Economic Analysis (BEA) reported strong Q1 Employment Cost Index numbers.The US Employment Cost Index is generally driven by a strong wage growth environment in which labor demand remains strong. The index rose by 1.2% in the first quarter, against the consensus of 1.0% and the prior reading of 0.9%. It is another indication that price pressures have remained hot in the January-March period. Daily digest market movers: Gold price weakens while US Dollar hovers near almost four-week high
Technical Analysis: Gold price slips below $2,300Gold reported steep losses after a breakdown of the Bearish Flag formation in the four-hour time frame. The Bearish Flag formation demonstrates a consolidation move after a sharp correction, generally following the ongoing trend. The near-term outlook is bearish as the Gold price is trading below the 20-period Exponential Moving Average (EMA), which is at $2,312.On the downside, March 23 high at $2,223 will be the major support for the Gold price. The 14-period Relative Strength Index (RSI) oscillates in the bearish range of 20.00-40.00, suggesting that momentum has leaned towards bears.More By This Author:US Federal Reserve Decision Preview: Markets Look For Clues About Interest Rate Cut Timing NZD/USD Price Analysis: Bears Reign Supreme, Bulls Nowhere To Be Found AUD/JPY Price Analysis: Bulls Ran Out Of Steam And Bears Claim Ground
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