Gold rose on Friday, after holding above the bearish channel’s lower line in the previous session. The yellow metal is currently trading near the bearish channel’s middle line, if it breaks above, it could extend its gains and touch resistance levels at $4544 then $4574. On the downside, if the price retreats, it could test support levels near $4455 then $4420.
Gold edged higher on Friday as investors assessed reports of a U.S.-Iran ceasefire deal amid growing concerns around inflation and U.S. interest rate hikes.
Market Watch
U.S., Iran reach agreement for ceasefire extension
The U.S. and Iran have reached an agreement on a memorandum of understanding to extend their ceasefire for 60 days, but U.S. President Donald Trump has yet to approve it, four sources familiar with the matter told Reuters.
The agreement will state how to address Iran’s stockpile of highly enriched uranium, which will be among the first issues discussed during the 60-day window, according to an earlier report by Axios, which broke the news.
U.S. inflation posts biggest annual rise in three years
U.S. inflation increased at its fastest pace in three years in April, driven by higher energy prices due to the Iran war and cementing economists’ views that the Federal Reserve would hold interest rates unchanged well into next year.
Surging price pressures are eroding household income and threatening to restrain consumer spending and economic growth this year. Income at the disposal of households after adjusting for inflation dropped for a third straight month in April, with the saving rate hitting a four-year low, other data from the Commerce Department showed on Thursday.
Dollar index heads for weekly loss
The dollar was firm against other major currencies on Friday, but on track to end the week lower, after reports the U.S. and Iran reached an agreement to extend the ceasefire in the Middle East and lift restrictions on shipping through the Strait of Hormuz.
The deal, still pending Trump’s approval, would extend the truce for another 60 days and allow traffic to flow through the strategic waterway while negotiators tackle difficult issues such as Iran’s nuclear program, four sources told Reuters.
Looking Ahead
Markets are awaiting the Fed officials’ speeches later today, which could influence gold prices.