Even though gold prices aimed higher on Wednesday, the yellow metal might find that maintaining its momentum will be difficult. A weaker US Dollar likely helped give XAU/USD the juice it needed to squeeze out a third consecutive daily gain. Gold’s 1.35% gain this week so far is shaping up to be the best since early January.
Fed Funds Futures indicated that markets priced in a peak policy rate of 5.5% in September shortly after the ISM figures. As a result, the 2-year Treasury yield jumped closer to 5%, bringing the rate closer to the 2007 high.
Traders will turn their attention to the next round of US jobless claims data and an economic outlook speech from Federal Reserve Board Member Christopher Waller.
On the daily chart, gold may be readying to resume the near-term downtrend since late January. A bearish Death Cross recently formed between the 20- and 50-day Simple Moving Averages (SMAs). In fact, over the past 24 hours, the 20-day line held as resistance, maintaining the downside focus.
