The current situation of the US dollar is driving the movement of gold prices as it heads into trade at the end of this week.
Making the US dollar lose its appeal when the market examines and reacts to the economic growth report of the United States (US) published in the New York session yesterday.
Somewhat surprisingly given the stark difference in numbers, the preliminary reading for US Gross Domestic Product (GDP) for the first quarter of 2024 was slower at 1.6% compared to a forecast of 2.5%.
The figure is also much lower than the fourth quarter of 2023 which was 3.5% and is the slowest reading since the first half of 2022.
With the decline of the US dollar this has given more room for gold to be traded up until today (Friday).
But investors are wary of waiting for the next indicative data in the New York session shortly, which is the PCE price index that measures the personal spending of US consumers.
Examining the XAU/USD price chart which measures the value of gold against the US dollar, a horizontal pattern was displayed from last Wednesday until yesterday.
The price is crossing above the Moving Average 50 (MA50) support line on the 1-hour time frame on the chart with the high level reached yesterday being around 2344.00.
A slow rising pattern was displayed today from the beginning of the opening of the Asian session until it continued into the European session with the current high reaching 2350.00.
Gold price movements are expected to be more vigorous in the next session with prices reacting to published data.
If the price continues to rise higher, the price surge will drive the direction back to the previous week's highs.
The highest record price of gold remains at 2430.00 which was reached on April 12 and is waiting to be challenged.
If instead the price plummets, the current support zone for gold is at 2300.00 which will be tested again.
Failing to support the price rebound, it is likely that the zone will be breached and investors will see bearish movement continue towards the target around 2270.00 or lower.
