Article by: ETO Markets

Since the beginning of the day, the US dollar has been under selling pressure, and its decline has been accelerated by remarks made by Federal Reserve Governor who expressed some dovish sentiment. The recent slowdown in economic activity is positive since it can mean that the monetary policy is strict enough to keep inflation under control. The central bank might cut the policy rate if inflation stays low for a few more months.

As long as there is upward pressure, the XAU/USD pair may make higher highs soon. Technical indicators are pointed firmly northward within positive levels on the daily chart, and the Relative Strength Index is already within overbought levels. The yellow metal also surged above directionless moving averages at the same time, with the 20-SMA currently trading at about $...

Gold has a strong short-term optimistic outlook. Technical indicators are oriented nearly vertically toward the north on the 4-hour chart, standing at severe levels but not showing any signs of upward fatigue. Strong purchasing demand is evident as the 20-SMA has surged northward, well below the present level and above the bullish 100- and 200-SMAs. The May monthly high of $… is the primary bullish goal for XAU/USD.