Gold price is looking to build on the previous rebound above $1,800.
Risk tone remains firmer despite doubts over ‘soft-landing’ amid hawkish Federal Reserve bets.
United States Durable Goods Orders disappoint, Consumer Confidence next of note.
Gold price awaits Falling Wedge confirmation on a daily closing above $1,814.
Gold price is extending the recovery momentum from two-month lows of $1,807 into early Tuesday. The United States Dollar is struggling to find its footing amid sluggish US Treasury bond yields and an upbeat market mood. All eyes turn to the US Conference Board (CB) Consumer Confidence data.
United States data to lead the Federal Reserve sentiment
Gold price staged a solid rebound on Monday after hitting the lowest level in two months in the early part of the day, as the US Dollar bulls remained in control amidst Friday’s hot United States Core Personal Consumption Expenditures (PCE) Price Index and escalating geopolitical tensions between the West and China over Russia.
The tide, however, turned against Gold sellers in American trading after the top-tier US Durable Goods Order disappointed and rekindled doubts whether the United economy could see a ‘soft-landing’, as the US Federal Reserve is set to maintain rates higher for longer. The headline US Durable Goods Orders sank 4.5% in January vs. -4.0% expected and 5.1% previous. The US Dollar Index pulled back sharply from multi-week highs of 105.36 on the data release to fall as low as 104.55, lifting Gold price to the $1,820 round figure. The retreat in the US Treasury bond yields also boded well for the non-yielding Gold. The benchmark 10-year US Treasury bond yield continues to face stiff resistance just shy of the 4.0% key level.
However, the further upside in the Gold price remained capped, as the US central bank is still anticipated to deliver three more 25 basis points (bps) rate hikes this year. Strong US Pending Home Sales data also partly helped limit the Gold price rebound. Next of relevance for the Gold price remains the US CB Consumer Confidence data, which will be released alongside other minority reports. Speeches from Federal Reserve officials will be also closely scrutinized for fresh trading impetus.
Upbeat market mood checks US Dollar bounce
Ahead of the US economic data releases, the market mood remains upbeat, as investors continued to weigh the potential for a soft landing, especially after Monday’s weak US Durable Goods data and comments from US Treasury Secretary Janet Yellen. In an exclusive interview with CNN News on Monday, Yellen said that she believes US inflation remains too high but that a soft landing is on the radar.
A firmer risk tone is reflective of the 0.20% gain in the US S&P 500 Futures while the Asian equities track the Wall Street higher. The risk-on market profile is limiting the recovery attempts in the United States Dollar, underpinning the Gold price for another potential upside this Tuesday.
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