All eyes in the gold market are firmly fixed on the critical $2,318 support level for XAU/USD as traders eagerly await key US economic indicators for fresh trading direction. Wednesday’s focus centers on mid-tier US Durable Goods data, although the main event of the week remains the release of the advance first-quarter US Gross Domestic Product (GDP) figures, particularly significant following disappointing US Preliminary Composite Purchasing Managers’ Index (PMI) readings earlier in the week.
S&P Global’s preliminary US Composite PMI Output Index, capturing both manufacturing and services sectors, declined to 50.9 this month from March’s 52.1 figure, failing to meet market expectations. This downturn in PMI indicators raises concerns about the resilience of the US economy, amplifying anticipation surrounding the forthcoming GDP report and its potential impact on expectations for Federal Reserve rate cuts.
Market sentiment currently suggests expectations for the first Fed rate cut in September, a notable shift from the beginning of the year when markets priced in approximately 150 basis points of cuts for the year, contrasting sharply with the current forecast of just 40 basis points of easing.
Resistance levels are anticipated at $2,334, followed by the psychological level of $2,350, and further static resistance around $2,360-$2,365. Conversely, support levels stand at the previous day’s low of $2,291, with the early April low near $2,265 serving as the last line of defense for gold buyers.