Market Overview
- Gold prices remain steady in the early Asian session, hovering near $3,235 due to easing trade tensions and a strengthening US Dollar.
- The US Dollar's strength is attributed to potential trade deals, reducing demand for safe-haven assets like gold.
- Major currency pairs like EUR/USD and GBP/USD experienced movements due to investor sentiment, economic themes, and risk factors.
- Geopolitical instability and interest rates continue to impact gold prices, which are priced in USD.
Fundamental Analysis
- Weaker-than-expected US Q1 GDP has increased the likelihood of further Fed rate cuts.
- Central banks remain significant buyers of gold, adding 1,136 tonnes in 2022.
- The European Central Bank is expected to cut rates due to slowing inflation and economic growth caused by US tariffs.
- The US April employment report is anticipated to show an addition of 130K new jobs with an unchanged Unemployment Rate of 4.2%.
Technical Analysis
- EUR/USD fell to around 1.1290 in early Asian trading on Friday as the US Dollar gained strength amid hopes of trade talks with China.
- USD/JPY was trading slightly lower at 145.30 at the time of writing.
- The USD/MXN technical outlook suggests a bullish trend for the Mexican Peso, with potential support at 19.46 and resistance at 19.88.
- Gold prices are poised for a pullback, with support levels at $3,200 and $3,167, while resistance levels are at $3,300 and $3,350.
Conclusion
- Despite easing trade tensions and a strengthening US Dollar, gold prices remain steady near $3,235.
- Major currency pairs like EUR/USD and GBP/USD have experienced movements due to investor sentiment, economic themes, and risk factors.
- Weaker-than-expected US Q1 GDP has increased the likelihood of further Fed rate cuts, which could impact currency valuations.
- The technical outlook for major currency pairs and gold suggests potential trading opportunities in the coming sessions.
