• The US dollar weakened after consumer inflation data.
  • DXY fell 0.4%, retreating from two-week highs.
  • XAU/USD hit a three-day high.

Gold prices are having their best day in weeks on Friday, helped by an overall decline in the US dollar. XAU/USD jumped from near $1,905 to $1,920 after the release of the US Personal Consumer Price Index.

Consumer inflation data showed a slightly stronger-than-expected decline, prompting a retreat in U.S. yields and boosting stock and commodity prices. American core PC it fell to 4.6% year-on-year in May from 4.7%, while headline fell from 4.6% to 3.8%.

The numbers dampened expectations of a Federal Reserve rate hike next meeting. Attention now turns to next week’s US labor market data, which includes ADP, Jobless Claims (Thursday) and the Nonfarm Payrolls report (Friday).

XAU/USD reflection

XAU/USD is hovering around $1,915, which is less than $10, but enough to make it the best day in weeks. The rally came after hitting a low of $1,892 on Thursday, a three-month low.

On the upside, XAU/USD is breaking a short-term downtrend line. Another area of ​​resistance is $1,920. On the other hand, a drop below $1,905 would weaken the near-term outlook for the yellow metal.

Technical levels

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