Gold jumps to six-day highs before retreating to $1980s

Gold is trading at $1987.05 per ounce at the time of writing. Wednesday’s US session is choppy for gold price, which is still moving sideways. Despite positive US data, the US dollar declines during the American session. In advance of the FOMC meeting next week, US Treasury rates hit new weekly lows.

The price of gold spiked at the start of the American session, going from $1,995 to $2,009, the highest figure in six days, before falling down to around $2,000 per ounce. XAU/USD was strengthened by a weaker US dollar and lower Treasury yields.

With Durable Goods Orders increasing 3.2% in March, above the 0.8% market consensus, US data exceeded expectations. Despite the positive figures, the US dollar fell versus the EUR, GBP, and JPY in particular.

While the 10-year Treasury rate is at 3.90%, the US 2-year Treasury yield is at 3.88%, its lowest point in three weeks. The US Dollar Index is currently down 0.73% on the day and trading at 101.99 (weekly low).

The lack of obvious drivers is seen to make the XAU/USD rally weak. Although the price cannot establish a solid break of the present range, the chart is positive. Given the approaching US data and the FOMC meeting the following week, volatility is expected to stay high. The US will release its initial estimate of Q1 GDP on Thursday, along with data on consumer inflation.

The next significant barrier lies around $2,030, and additional increases would be implied by a consolidation above $2,005. On the other hand, support is available if the current retreat continues.