The US CPI data and retail sales data were released this week, and the bulls wanted to take advantage of the opportunity to counterattack

Daocheng Technology Financial News - Monday (May 13) Asian City,Spot goldThe price of gold rose 0.6% to close at $2360.75 an ounce on Friday, recording its best weekly performance in five weeks, as recent weak U.S. employment data strengthened expectations for the Federal Reserve to cut interest rates, driving gains in non-yielding gold.Investors are currently anticipating the release of the US Producer Price Index (PPI) this week.Consumer Price Index(CPI) andUS retail sales data(Commonly known as "terror data"), both of these data could have a significant impact on the price of gold.

                              (Daily chart of spot gold)

U.S. gold for June delivery closed up 1.5% last week at $2375.00 an ounce.Gold rallied more than 1 per cent on Thursday after data showed weekly jobless claims rose more than expected.

Phillip Streerial, chief market strategist at Daocheng Technology, said the surge in gold buying was mainly driven by technical factors, but last week's employment data and Thursday's jobless claims data provided support.

Financial marekt expects the Fed to begin its easing cycle in September.

At the same time, near-record domestic prices dampened demand for physical gold in India, the world's second-largest gold consumer, during a major holiday.

After two weeks of consolidation, some analysts say gold is attracting some fresh bullish attention after holding on to initial support around $2,300.

The price of gold rebounded from the low point at the beginning of last week. The highest intraday price hit $2378.27/ounce on Friday, a new high since April 22. It closed up nearly $60 last week and recorded its best weekly performance in five weeks.

Meanwhile, silver managed to rise above $28 an ounce after holding on to key support levels.

Last Friday's preliminary consumer confidence survey from the University of Michigan showed that optimism fell to a five-month low, while inflation expectations rose to a near two-year high.

Ole Hansen, head of commodity strategy at Saxo Bank, said the renewed rise in gold prices was not surprising because the market's bullish beliefs had not been tested during the two-week consolidation.

"We are now seeing a technical breakthrough, supported by signs of a cooling US labour market," he said. "With inflation under control, the number of expected US rate cuts has increased from one to two."

However, some analysts have warned that while the market currently expects two rate cuts this year, those expectations are highly volatile.

Naeem Aslam, chief investment officer at Zaye Capital Markets, said he expected gold and silver to rebound in the near term. "Traders are not getting a clear signal from the Fed about its monetary policy," he said. "The jobs data and other economic data suggest that the economy is slowing, but the Fed remains determined to keep interest rates higher for longer. All of this has allowed the dollar index to strengthen again and gold to lose its luster."

From a technical perspective on gold, Alex Kuptsikevich, senior market analyst at FxPro, said that gold and silver have regained momentum after successfully holding key retracement levels.

"The latest rally has renewed the recognition that the decline in the second half of April was a corrective correction," he said. However, Mr. Kuptsikevich added that despite the strong gains in gold and silver, there was still a lot of work to be done to attract new capital and drive prices above their recent all-time highs above $2,431.

"With high bond yields in the developed world, further increases in gold prices, large budget deficits in many countries and the need to support the economy make it seem that upside potential is limited," he said. "Until gold and silver reach new levels, we doubt that a new upswing to the highs will succeed and think they are likely to fall again."

While gold prices are likely to continue to consolidate, Peter Granditch, a prominent financial analyst and market strategist, said there were still upside risks for gold and silver due to weaker economic activity and interest rates having peaked. However, he added that investors should be patient.

"It's hard for me to imagine gold falling significantly below its recent lows and gold still rising by hundreds of dollars (if not more)," he told Kitco News. "I don't think this rally will be as difficult and rapid as it was earlier this year, but my long-term goal is $2,536, which is the easiest to achieve this year.

With a renewed focus on economic fundamentals, some analysts have pointed out that this week will be a crucial moment when gold and silver could recover and rise to record highs.

The main economic event this week will be the consumer price index (CPI) in April, after the Federal Reserve said it was not doing enough to fight inflation as prices remained well above its 2% target.

Barbara Lambrecht, precious metals analyst at Commerzbank, said in a note on Friday that "if [consumer] prices rise strongly again, hopes of a small near-term rate cut could be dented again. By then, gold prices should fall back again".

In addition to the US CPI data, some analysts said the US retail sales data - known as "terror data" - would also draw some attention after Friday's disappointing consumer confidence data. Traditionally, consumers who are less optimistic about the health of the economy will cut back on spending, which will weigh on economic activity.