Gold is trading low on Friday morning due to strengthening dollar and rising U.S. yields. As an uptick in the dollar and U.S. Treasury yields pressured bullion, while investors are awaiting crucial U.S. inflation data later in the day.

Data released on  Thursday showed the number of Americans filing new claims for unemployment benefits has dropped more than expected last week as layoffs subsided. A separate report from the Commerce Department confirmed economic growth accelerated at a 6.4% annualised rate last quarter.

Elsewhere, Federal Reserve Bank of Dallas President Robert Kaplan said the labour market was more tighter than levels of employment suggest. Investors are waiting for the monthly U.S. personal consumption report due later in the day to gauge inflationary pressure.

Whereas Fed officials have recently downplayed rising price pressures and made a affirmation on their support to keep monetary policy accommodative for some time.

“While inflation fears have stalked the markets across the month, the Fed has been consistent and vocal in reining in expectations of a move to tighten policy.” The Fed has targeted an annual inflation of 2% over the past decade but it has barely met that goal.

On the other hand, the CPI, which includes food and energy components, registered a 4.2% growth in April for its largest increase in almost 13 years after intense cost increases in an economy rapidly recovering from the coronavirus pandemic. Prices of almost everything, from houses to the lumber that goes into building them, soared in recent months, scaring economists into believing that inflation growth in 2021 could be the highest in 35 years.

XAU/USD 4 Hour Chart:

Support: 1888.4 (S1), 1880.6 (S2), 1873.0 (S3).

Resistance: 1903.9 (R1), 1911.5 (R2), 1919.4 (R3).

Gold is trading low due to hopes on US dollar.