Gold Rebounds from Weekly Lows as Bulls Test $3,300 Resistance

Gold prices showed significant volatility over the past 24 hours, with yesterday (May 29) marking the first substantial upward movement in several sessions.

As visible in the technical chart, gold futures surged nearly 1% during May 29 trading, with the most active June contract gaining approximately $30 to reach $3,308.99 per ounce.

This represented a significant rebound from recent weekly lows and was the strongest upward momentum seen in the precious metal for quite some time.

The upward movement on May 29 was primarily triggered by key U.S. economic figures released yesterday, particularly disappointing employment data that exceeded market expectations.

Initial jobless claims for the week ending May 24 rose to 240,000, up from the previous week’s 226,000 and surpassing economist forecasts of 230,000. This concerning employment data, combined with dollar weakness of 0.6%, created favorable conditions for gold’s rally.

However, during overnight trading, gold experienced a retracement, with spot gold currently trading around $3,296.24 as of 05:51 UTC on May 30.

Despite this overnight pullback, technical indicators suggest fair chances that the upward movement initiated yesterday will continue, as gold has managed to recapture the critical 21-day Simple Moving Average at $3,292 on a daily closing basis.

Current Price Levels

International Markets:

• Spot Gold: $3,296.24/oz (showing overnight retracement from yesterday’s gains)
• Gold Futures: $3,308.30/oz
• COMEX Gold: Current levels reflecting the overnight consolidation

Indian Markets:

• 24-carat gold: Rs 9,704 per gram (down Rs 44 from previous day)
• 22-carat gold: Rs 8,995 per gram (down Rs 40)
• 18-carat gold: Rs 7,278 per gram (down Rs 33)

What Happened During May 29 and Overnight

May 29 marked a pivotal day for gold markets, breaking a pattern of recent weakness with a robust 1% surge driven by fundamental U.S. economic data.

The rally represented a significant rebound from recent weekly lows, with the precious metal gaining approximately $30 during the session. This was the first substantial upward movement in recent trading sessions, signaling a potential shift in market sentiment.

The primary catalyst was the release of U.S. Initial Jobless Claims data showing an increase to 240,000 for the week ending May 24, significantly exceeding forecasts of 230,000.

This concerning employment data intensified speculation about potential Federal Reserve policy shifts and increased pressure on the central bank to consider interest rate cuts.

During overnight trading into May 30, gold experienced some profit-taking and retracement, giving back a portion of yesterday’s gains. However, the technical structure remains supportive, with gold maintaining its position above key moving averages.

Global Market Analysis

United States:

The dollar’s 0.6% decline on May 29 created the perfect storm for gold‘s advance, as the precious metal typically moves inversely to the greenback.

The currency weakness reflected market concerns over economic contraction data and ongoing uncertainty surrounding trade policy implementation.

A U.S. Court of International Trade ruling that struck down Trump-era tariffs also contributed to dollar weakness, though this had minimal direct impact on gold compared to the employment data.

Technical Analysis

Key Support and Resistance Levels:

• Immediate Support: $3,280 – $3,250 range
• Critical Support: 21-day SMA at $3,292 (recently recaptured)
• Resistance: $3,330 – $3,350 – $3,400 per ounce

Technical Indicators:

• RSI: Moved back above midline to 52.28, reviving bullish bias
• 21-day SMA: Successfully recaptured at $3,292, now acting as support
• 38.2% Fibonacci Retracement: Aligns near the $3,292 level
• Pattern: Yesterday’s rally broke recent bearish momentum

Market Maker Commentary

Tim Waterer, chief market analyst at KCM Trade, noted: “Gold’s decline below $3,300 attracted some buyers. If the support in the $3,250 to $3,280 range persists, gold could be positioned for another attempt towards $3,400, should risk appetite diminish.”

Technical analysts suggest that if gold holds the 21-day SMA at $3,292 on a sustained basis, the rebound could target the previous day’s high of $3,330, followed by the $3,350 psychological level.

Fundamental Drivers

Employment Concerns:

The surge in jobless claims to 240,000 has increased speculation about Federal Reserve policy shifts. Lower interest rates would reduce the opportunity cost of holding gold, making it more appealing to investors seeking portfolio diversification and inflation protection.

Dollar Dynamics:

The 0.6% dollar decline on May 29 was the primary driver enabling gold’s rally, as currency depreciation creates favorable conditions for the precious metal.

Market Outlook

The technical setup suggests fair chances that yesterday’s upward movement will continue, particularly if gold can maintain its position above the 21-day SMA at $3,292. The 14-day RSI moving back above the midline to 52.28 has revived the bullish bias in the near term.

Traders are now awaiting the U.S. core Personal Consumption Expenditures (PCE) Price Index data, which could provide further direction.

If the support in the $3,250-$3,280 range holds firm, gold could be positioned for another attempt toward $3,400 levels. The employment data has created a foundation for potential Federal Reserve policy reconsideration.

However, the CME Fed Watch tool indicates only a 5.6% probability of a rate cut at the upcoming June 18 Federal Open Market Committee meeting. Nevertheless, the concerning employment trend could build momentum for future policy shifts if it continues.

Volume and Market Sentiment:

Yesterday’s 1% surge with significant volume suggests renewed investor interest in gold as economic uncertainties mount. The ability to recapture key technical levels during the rally indicates underlying strength that could support further upward movement despite the overnight retracement.

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error

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