The price of gold (XAU/USD) failed to build on Thursday’s gains on Friday with the yellow metal experiencing a consolidative pattern. The XAU/USD (gold) rebounded on Thursday to hit a weekly high of $1,289 after bottoming at $1,269 early in the week.
The price of gold has traded within a range of $1,266 and $1,303 since mid-April. This consolidative movement appears set to continue through next week as the market prepares for key economic reports from the US market at the start of June.
XAU/USD (Gold) Fundamentals Overview
From a fundamental perspective, the yellow metal is trading at the back of what has been a low week for the US economy. The US stocks have mostly lost gains during the week with the major indices looking to end the week lower from last week.
In addition, with the Yield’s dropping to 2017 lows, some investors will be looking to move some of their capital investments to safe-havens like gold. The pressure on the US economy was on Friday compounded by the release of weak durable goods data with a decline of 2.5% versus a projected fall of 2%.
XAU/USD (Gold) Technical Analysis (the 240-min Chart)
Technically, the price of gold appears to be settling in a sideways movement with the $1,287 acting as the short-term resistance while $1,270 plays the role of a key support zone. The two levels will provide traders with good opportunities to net profits in the short-term.
But for now, it looks like the bears will be claiming control going into next week especially given Thursday’s rally. The price of gold appears to have hit a key resistance zone, which suggests that in the short-term, a pullback can be expected.
XAU/USD Technical Analysis (the Daily Chart)
In the daily chart, the picture is clearer as the bearish bias is well demonstrated. However, in this case, the bulls will claim to have some room for more profits before hitting the trendline resistance.
Furthermore, the XAU/USD (gold) appears to have strong support down below as the yellow metal holds firm above yearly lows. Gold has not traded below $1,250 since December last year. This suggests a potential case of short-term consolidation in what appears like a triangle formation.
In summary, the XAU/USD (gold) maintains an intermediate bearish bias while the bulls will claim control of the current bullish momentum. And with the trade wars with China also weighing on the economy, the gold bulls will be happy going into next week.