Gold prices consolidate above key support of 20-DMA

• Gold bulls holding price up at the 20-DMA.
• US GDP was a minor cut for the bulls which managed to close in the green.

Gold has eeked out a small gain on Friday despite a solid performance in the greenback and far better than expected Gross domestic Produce data. The DXY was trading 0.21% higher in the final trading hour on Wall Street, oscillating around the 98 handle while the price of the yellow metal was also over 0.20% higher. gold travelled between a low of $1413.58 and $1424.84.  

Earlier in the session, gold did take a knock on the GDP data showing the economy grew at a 2.1% annual pace from the start of April to the end of June. However, the data showed that economic growth slowed from a 3.1% gain in the first three months of the year and this, markets are indeed expecting a Federal Reserve rate cut next week.    

As a result, Gold futures settled modestly higher Friday, regaining the ground lost immediately after the data release. August gold added $4.60, or 0.3%, to $1,419.30 an ounce although has printed a weekly loss of 0.5% based on last Friday’s settlement which snapped a string of two consecutive weekly gains.  

Overall, the precious metal market remains fairly calm and silver has moved into a consolidation also as the markets  become unwilling to make significant bets heading into the FOMC.  

“For gold, any signs of good economic data continue to see prices trend to the lower bound near $1,400/oz, while disappointing data firms expectations of aggressive Fed interest rate cuts and sees the yellow metal challenge recent highs near $1,440/oz.

In this context, this morning’s data suggest precious metals should remain fairly range-bound, as stronger GDP and personal consumption data are likely to be offset in some capacity by persistent inflation worries, as core PCE was below expectations,”

analysts at TD Securities argued.  

Gold levels

Gold prices have fallen to test the 20-day moving average at 1410 but has so far held there ahead of the  1400 round number, a level that is back-up by a confluence of Fibos lining ahead of 1382 swing lows. Bears can look to the 1373/76 zone which then comes into play lower down,  meeting  the 19th June spike correction lows. On the upside, 1430/40 and 1450s are key argets.