The US Dollar Index (DXY) continued its upward momentum, trading near two-week highs around the 98.70 level, supported by stronger-than-expected US economic data and ongoing geopolitical uncertainty, particularly tensions between the US and Iran [1][3]. Weekly Initial Jobless Claims in the US rose to 214,000, slightly above the forecast of 212,000, but still indicative of a resilient labor market [1][3]. Preliminary S&P Global PMIs for April surprised to the upside, with Manufacturing at 54 and Services at 51.3, reinforcing the view that the US economy remains on solid footing [1][3]. The US 10-year Treasury yield surged nearly 4.5 basis points to 4.349%, further underpinning the Greenback and weighing on gold prices [3].
Currency markets are consolidating as the April 28 War Powers Resolution deadline approaches, with USD/CNY flattening after an earlier relief rally [2]. Geopolitical tensions between the US and Iran are complicating central bank decisions, with most policymakers expected to keep rates steady while monitoring stagflation risks [2]. Asia’s most oil-dependent currencies, including INR, KRW, and PHP, are expected to continue fluctuating with oil prices, as authorities stand by to discourage one-way bets on depreciation [2].
Gold (XAU/USD) eased on Thursday, trading at $4,716, down 0.48%, after reaching a daily low of $4,664 [3]. The decline was attributed to strong US PMIs and rising Treasury yields, which blunted gold's haven appeal amid persistent war fears [3]. The Israeli press reported that Iran’s Parliament Speaker Mohammad Bagher Ghalibaf resigned from the negotiating team, citing interference from the IRGC, though different Iranian journalists denied this, adding to the uncertainty [1][3]. WTI Crude Oil prices rose on the headline of Ghalibaf’s resignation, while gold extended its losses near $4,700 [3].
Technical analysis suggests further losses for gold if XAU/USD clears $4,650, with the next area of interest at $4,600. A breach of this level would expose the December 26 daily high, now support at $4,549. For a bullish continuation, gold must climb above the 100-day SMA and the $4,800 milestone, with resistance at the 50-day SMA at $4,876 [3].
Looking ahead, the consensus expects global central banks to maintain steady rates as policymakers grapple with stagflation risks amid the US-Iranian stand-off [2]. In the US, traders will focus on the final revision of the University of Michigan Consumer Sentiment reading for April [3].
CONCLUSION
Strong US economic data and rising yields have propelled the US Dollar higher, while gold has come under pressure amid persistent geopolitical tensions and robust business activity. Currency markets remain cautious ahead of the April 28 War Powers Resolution deadline, with central banks expected to keep rates steady. The market is closely watching geopolitical developments and upcoming economic releases for further direction.