Gold Price Awaits Direction Amid Upcoming Fed Announcement and Key US Data

GOLD price (XAU/USD) is exhibiting a back-and-forth movement above $1,980.00 during the Tokyo session. The precious metal is struggling to find a clear direction as investors await the Federal Reserve’s (Fed) monetary policy announcement and other crucial US data.

S&P500 futures have recovered more of the earlier losses in Asia, as the risk-taking appetite of market participants improves. The US Dollar Index (DXY) is looking for support after correcting around 102.00. In early Asia, the USD Index declined after failing to break through two-week-old resistance at 102.20. It appears that the USD Index’s upside is limited, as the market expects neutral guidance from Fed Chair Jerome Powell on interest rates.

On Monday, the US ISM Manufacturing PMI (April) managed to bounce back to 47.1 from its lowest level of 46.3 recorded since May 2022. However, a figure below the 50.0 threshold indicates a contraction in economic activity. The US Manufacturing PMI has remained below 50.0 for the sixth consecutive time, as higher interest rates by the Fed and a weak demand outlook have led to capacity underutilization by firms.

Looking ahead, the US Automatic Data Processing (ADP) Employment data will be of significant importance. Estimates suggest that the US labor market has seen an addition of 150K new employees, higher than the previous release of 145K.

Gold Technical Analysis:

GOLD price has been consolidating within a narrow range of $1,971-2,021 over the past week, as investors await the Fed’s monetary policy for a decisive move. An upward-sloping trendline from the March 22 low at $1,934.34 is providing support for Gold bulls.

The 20-period Exponential Moving Average (EMA) at $1,990.28 is sticking close to the Gold price, indicating a lackluster performance.