Gold stands at the back foot as dollar benefits from higher US inflation

Gold holds in red for the second consecutive day, pressured by stronger dollar on growing uncertainty in the Middle East and sidelined expectations for potential Fed rate cuts, as inflation in the US rose further (both consumer and producer price index rose significantly in April).

Fundamentals, however, show mixed signals as Fed is likely to stay on hold until the end of the year that would add support to dollar, while growing worries of further economic slowdown would partially counter negative impact and keep the metal’s price afloat.

Near-term action moves within $4650/$4770 congestion (also holds within daily cloud) and moving around range’s mid-point ($4700 zone) after repeated upside rejection ($4764/$4773), with the range floor being reinforced by daily cloud base ($4667) and daily Tenkan-sen ($4637).

Technical picture on daily chart is mixed (neutral momentum studies / MAs in mixed setup), although currently forming 55/100DMA may produce stronger pressure.

Look for initial negative signals on violation of near-term range floor that would boost downside potential on formation of double-top ($4764/73) and unmask next key support at $4500 zone.

On the flip side, break above $4773 and 100DMA ($4790) would brighten near-term outlook and open way for attack at daily cloud top ($4848).

Res: 4700; 4773; 4790; 4835
Sup: 4650; 4636; 4546; 4500