Gold price ended the week on a higher note after recouping its losses from earlier in the week. The released US inflation data have had a significant impact on the metal’s price movements. In particular, Wednesday’s CPI numbers heightened inflation fears. At 0.8%, it was the highest figure in over a decade. Analysts had expected a reading of 0.2%. Subsequently, the US dollar rose from 90.02 to 90.78 as investors contemplated on the possibility of Fed hiking interest rates sooner than expected.
However, the stagnation of April’s retail sales helped gold price rebound. At 0.0% compared to the expected 1.0%, the US retail sales numbers were a sign that the government’s stimulus package has began to fade.
In the coming week, the focus will be on the FOMC meeting minutes on Wednesday. The Fed has maintained a dovish tone as it holds that the economic recovery is still incomplete and uneven. A dovish tone is a bullish catalyst for gold price. Ahead of the minutes, Fed’s Governor Christopher Waller and Richmond Fed President, Thomas Barkin have downplayed the inflation fears triggered by the strong CPI numbers.
Gold Price Technical Outlook
After inflation fears pushed gold price to the week’s low of 1,810.36 on Thursday, the metal rebounded to close the week at 1,843.16. At its current price, it is trading along a resistance level of 1,840. Notably, it has been a crucial resistance-turn-support level since September 2020.
On a daily chart, it is trading above the 25 and 50-day exponential moving averages. It is also within an ascending channel, with the 25-day EMA being along the channel’s lower border. In the week ahead, gold price is likely to rise to 1,858.80, where it will find resistance along the channel’s upper border. As the week unfolds, the price may reach 1,870. On the flip side, the psychological level of 1,800 is likely to remain a key area of support/resistance.