Gold rose more than 1% in the middle of the North American session on strong economic data from the United States.
Consumer spending was stronger than expected and it was able to prevent the Federal Reserve (Fed) from reducing borrowing costs. This can prevent the yellow metal from climbing further.
Meanwhile, the price of gold is now at $2,382.21, which is down by 0.02% since the opening of trading in the Asian session early this morning.
XAU/USD traded at $2,384 after hitting a daily low of $2,324. Investors remain concerned about possible retaliatory actions by Israel after they were bombarded with missiles and drones by Iran.
Although the White House has warned Israel not to retaliate, they stand by their stance that they will carry out the revenge attack.
The move will likely continue to support safe-haven assets including gold and the US dollar. It is possible for both to strengthen in tandem.
From an economic perspective, US Retail Sales data in March remained robust. Headlines in the record-setting control group sales in the US GDP rose sharply and could be the start of strong growth in the first quarter of 2024.
The Gross Domestic Product (GDP) projection for the first quarter of 2024 shows that the US economy is expected to grow 2.8%, which is an increase from the estimate of 2.4% on April 10.
From a technical point of view, gold remains in favor of continuing to make bullish movements based on the view of the Relative Strength Index (RSI).
RSI indicates overbought activity than usual. Market participants need to be aware that the 80 level is usually seen as an overly overbought area.
The market is now targeting XAU/USD to exceed $2,400 in the near term and place an upper support base at $2,431 followed by $2,450.
