Weighed By Dollar Strength Yesterday But Stronger So far Today

Gold is 0.4% higher in today’s Asia-Pac session. This comes after it closed 0.8% lower at $2504.61 on Wednesday, amidst US dollar strength.

• Bullion has rallied this year, with recent gains supported by expectations that the Federal Reserve is poised to lower borrowing costs. Fed Chair Jerome Powell said last week that the “time has come” to ease, although other officials including Fed Bank of Atlanta President Raphael Bostic have struck a slightly more cautious tone. Lower rates are typically positive for gold, which doesn’t pay interest.
• From a technical perspective, bullish conditions in gold remain intact, with a focus on a climb towards $2,536.4 next, a Fibonacci projection. Initial support to watch lies at $2,475.4, the 20-day EMA. Short-term weakness would be considered corrective.
• Meanwhile, silver has underperformed, falling by 2.3%. For silver, a medium-term bearish cycle is still intact and recent gains appear to be a correction - for now.
• Key support is seen at $26.018, the May 2 low, while on the upside the 50-day EMA has been cleared and is a concern for bears. A continuation higher would cancel the bearish theme and expose $30.502 next, a Fibonacci retracement.