Judging by the persistent USD selloff, the precious metal has the potential for further gains, though there is a risk of local corrections due to some overbought signals. The greenback is under substantial pressure against most major currencies, and the mood intensified after yesterday’s data showed the U.S. producer prices fell for the first time since August 2016. The report added to concerns that the Fed won’t hike three times this year while other major central banks are set to tighten this year.
If gold manages to hold its gains, spot prices will focus on the immediate at $1,334.30, while the next hurdle is expected at $1,340. This barrier may dent the buyers’ enthusiasm and sent the precious metal in the correction mode.