The precious yellow metal prices weakness extends into the Thursday session after two attempts at the key resistance area of $1,870-80 proved a tough challenge for the bulls.
The bears’ numbers increased after the minutes from the last U.S. Federal Market Open Committee (FOMC) meeting on the 3-4 of May suggested the central bank won’t be any more hawkish in aggressively raising interest rates in the months to come.
The U.S. Federal Open Committee Meeting (FOMC) minutes revealed an agreement among Fed officials that inflation was “elevated, reflecting continued supply and demand imbalances, higher energy prices, and broader price pressures.”
However, the U.S. Federal Open Market Committee (FOMC) is likely to continue to raise interest rates by a half-percentage point each in June and July, amid growing urgency to combat surging inflation and avoid an economic downturn.
Looking forward to Thursday is the release of the U.S. Gross Domestic Product (GDP) and Friday’s Personal Consumption Expenditure (PCE) Index data for near-term directional guidance.
Turning to the technical assessment, the Relative Strength Index (RSI) indicator, 3-daily ‘lookback’, has buckled and holds a negative bias, while the Moving Average Convergence Divergence (MACD) supports a positive signal. The ADX indicator holds to a ranging market.
To reinstate the bearish sentiment, the break of the support level at $1,838-42 should initiate a move to $1,810-12. Reassess from there.