prices rallied above two months high yesterday as safe-haven demand increased after comments from US Federal Reserve Chairman Jerome Powell when he said that the US economy is doing better, but is not out of the woods yet.
Gold is currently trading near $1,785, which is sharply from a recent low of $1,673.30 registered during March.
Meanwhile, the maintained its current policy settings, including keeping the cash rate at 0.1%.
Gold prices also found support from poor US economic data as US manufacturing activity grew at a slower pace in April. US March rose +0.2% m/m, against expectations of +1.6% m/m.
Also, the April index unexpectedly fell -4.0 to 60.7, against expectations of +0.3 to 65.0.
Rising inflation is also supportive of gold prices, the US April ISM price paid sub-index rose +4.0 to a 12-3/4 year high of 89.6, stronger than expectations of 86.0. Also, South Korea’s consumer inflation accelerated to a near four-year high in April due to rising and agricultural prices.
However other global economic data were bearish for gold. German March rose +7.7% m/m, against expectations of +3.0% m/m and the biggest increase in 10 months.
Gold prices have ongoing support from the COVID-19 pandemic which is dovish for central bank policies. The overall global COVID caseload has topped 153.1 million, while the deaths have surged to more than 3.20 million, according to the Johns Hopkins University.
According to the CFTC Commitments of Traders report for the week ended Apr. 27, net long for gold futures plunged by 10,879 contracts to 170,619 for the week. Speculative long position slipped by 5,268 contracts, while shorts increased by 5,611 contracts.
Gold prices likely to remain firm while above 50 days EMA of $1,767 however it may face stiff resistance near $1,817 and $1,836.