• Gold gains over 0.30% despite pressure from high US Treasury yields.
• Hawkish comments from Fed officials, including Gov. Michelle Bowman, are moderating gold’s appreciation.
• XAU/USD traders are eagerly awaiting the release of headline US PCE inflation data.

The price of gold rose slightly slow in the North American session, up about 0.15% amid high U.S. Treasury yields that make holding the unprofitable metal less attractive. As a result, the dollar made up for its previous losses, limiting the boost in the value of gold. The XAU/USD rate is USD 2,357, which is 0.28% higher than the opening price.

Wall Street is reporting losses and the 10-year Treasury yield is soaring to its highest level since early May. This caused a spike in real yields, which usually correlate inversely with gold prices, holding back the yellow metal’s growth.

Representatives of the Federal Reserve (Fed) crossed the line on Tuesday, delivering a hawkish message. On the data side, consumer confidence in the Conference Board’s (CB) survey improved in May, but recession fears have resurfaced.

In the coming week, investors are preparing for the expected release of the April Personal Consumer Expenditures (PCE) Price Index, the Federal Reserve’s (Fed) preferred measure of inflation. The baseline is expected to be 2.8% y/y and the expected PCE boost is 0.3% m/m.

Daily summary of market changes: gold price rises and falls around $2,350

• Gold prices remain in the green but have hit three-day highs of $2,364 on elevated U.S. Treasury yields.
• US 10-year Treasuries yield 4.538%, up seven basis points and strengthening the dollar. The US Dollar Index (DXY), which tracks the dollar’s performance against a basket of peers, is at 104.61, up 0.03%.
• Fed Governor Michelle Bowman said she would support waiting for a slowdown in the pace of quantitative tightening or a more moderate slowdown in balance sheet trickle-down.
• Finally, Minneapolis Fed President Neel Kashkari said that in his opinion, no one has ruled out further interest rate increases and added that he expects no more than two rate cuts in 2024.
• U.S. Conference Board consumer confidence improved in May after three months of declines, rising to 102.0 from 97.0, beating estimates of 95.9.
• Despite the improvement, Dana Peterson, chief economist at The Conference Board, wrote: “a return to recession concerns is possible.”
• In May, Americans’ perception of the likelihood of a US recession in the next 12 months increased again.
• Data provided by the Chicago Board of Trade (CBOT) shows that Fed Funds rate futures project just 25 basis points of interest rate cuts in 2024.

Technical Analysis: Gold price remains stable even as buyers lose momentum

Gold’s uptrend continues, although growth is showing signs of exhaustion and momentum is starting to wane. The Relative Strength Index (RSI) shows that buyers are dominant but losing momentum as the RSI flattens.

Therefore, if XAU/USD fails to sustain gains above $2,350, it will put downward pressure on the yellow metal, exposing key support levels.

The first support will be a psychological amount of $2,350. After clearing, the next stop will be the May 8 low at $2,303, followed by the May 3 cycle low at $2,277.

On the other hand, if XAU/USD stays above USD 2,350, further gains will come at the expense of overhead costs. Next up will be $2,400, followed by a year-high of $2,450 and then $2,500.