Gold has managed to gain upward momentum which pushed the price higher towards the 1290.00 resistance area forming a bullish counter.
Gold found early support as markets weighed up an increase in the US tariffs on imports from China, souring sentiment and weighing on bond yields. That bolstered the appeal of non-interest-bearing alternatives. Investors are waiting to see the Federal Reserve's response to the change in the US trade policy as the Retail Sales index is expected to climb by 0.2% in April, while the University of Michigan's Confidence survey is likely to show an increase to 97.9 in May from 97.2 in April.
Recently, the statements of the Fed's officials about the current economic status were quite mixed. Due to the US-China trade war, Atlanta Fed President Raphael Bostic warns that consumer will feel the hit of boosted tariffs while the inflation is quite low. According to the Fed's comfort, US inflation has been too weak, while the regulator has been trying to achieve the 2% target. Bostic cautioned about the situation when the price pressure may push inflation higher which might be unbearable for mass consumers.
This week, the US Retail Sales report is likely to show a decrease to 0.2% from the previous value of 1.6%. Today FOMC member Clarida is going to speak about the short-term interest rates and monetary policy decisions.
As for the current scenario, gold is likely to regain momentum as the pessimistic forecast for the high impact economic reports from the United States is expected to influence the market sentiment. As the price breaks above 1290 with a daily close, the upward path is quite clear to head towards the 1310 resistance area in the coming days.
SUPPORT: 1265, 1276
RESISTANCE: 1290, 1310
BIAS: BEARISH
MOMENTUM: VOLATILE
