Gold is hovering near $1,855, defending the previous day’s corrective pullback from a one-week-old support line during Thursday’s Asian session, as sluggish markets and a lack of significant data/events limit the metal’s immediate moves. The mixed play of US dollar moves and sentiment challenges, particularly from China and Ukraine, also puts pressure on commodity prices.

The US Dollar Index (DXY) has faded the bounce off a one-month low, struggling to stay above 102.00, after the latest Federal Open Market Committee (FOMC) Minutes endorsed 50 basis points (bps) of rate hikes for only the next couple of meetings, casting doubt on the rate-lift trajectory beyond September on statements such as, “It would be appropriate to consider sales of mortgage-backed securities.”

It’s worth noting that another set of US data, the April Durable Goods Orders, has joined the downbeat housing figures in weighing on the US dollar amid growing concerns. According to the most recent US Durable Goods Orders, growth slowed to 0.4 percent MoM versus market forecasts and was revised down from 0.6 percent previously. In addition, Core Durable Goods Orders increased 0.3 percent MoM, compared to 0.6 percent expected and 1.1 percent prior (revised).

However, recent news from China and Ukraine appears to challenge market sentiment and keep the greenback on the bull’s radar, weighing on GOLD. According to Reuters, “Ukrainian President Volodymyr Zelensky slammed suggestions that Kyiv gives up territory and make concessions to end the war with Russia, saying the idea smacked of attempts to appease Nazi Germany in 1938.” On the other hand, China criticizes the United States’ draft Security Council resolution on North Korea, adding to the recently heightened Sino-American tensions.

Even though Wall Street managed to post significant gains, the S&P 500 Futures remain directionless, near 3,975. Furthermore, US Treasury yields were hovering around 2.74 percent as of press time. A light calendar emphasizes risk catalysts for new impulse ahead of the US Q1 2022 GDP, Weekly US Jobless Claims, Pending Home Sales for April, and the Fedspeak.

Gold Technical Outlook

Gold price has a slight bearish bias, influenced by stochastic negativity, on its way to a potential test of 1850.00, while the EMA50 meets this support to add more strength to it, implying a bullish trend that is dependent on stable prices above 1850.00 and 1838.10 levels, trying to remind you that our next main target is located at 1890.00.

Today’s trading range is expected to be between 1845.00 support and 1885.00 resistance. Good luck!