<\/p>\n
Gold price<\/a> (XAU\/USD) is trading higher on Friday, in the $2,400s, helped by positive data from China that brightened the prospects for the country with the world\u2019s largest market for Gold.\u00a0<\/p>\n In the US, meanwhile, a raft of secondary data released on Thursday came out mixed and Federal Reserve<\/a> (Fed) officials repeated their mantra that inflation was still not coming down fast enough to contemplate cutting interest rates, with an overall neutralizing effect on Gold price.\u00a0<\/p>\n Gold had been rallying after cooler US inflation data and weak US Retail Sales released on Wednesday suggested the Fed might be closer to cutting interest rates than previously thought. The expectation of lower interest rates increases the attractiveness of non-yielding Gold to investors.\u00a0<\/p>\n Gold got a shot in the arm on Friday after Chinese Industrial Production showed an expectation-beating 6.7% rise year-over-year in April, according to data from the National Bureau of Statistics of China. Economists had forecast<\/a> a more modest 5.5%. The figure was substantially higher than the 4.5% reading registered in March.\u00a0<\/p>\n Despite the positive data, some economists remain skeptical about Chinese growth, describing it as \u201cuneven\u201d.\u00a0<\/p>\n \u201cActivity data for April suggested growth remained uneven. Growth was supported by investment growth and exports, while consumption slowed,\u201d said Tommy Wu, Senior Economist at Commerzbank.\u00a0<\/p>\n Wu says greater fiscal spending is required to keep growth momentum steady and points out that the Chinese government is starting to sell sovereign bonds in order to boost spending. Much of the country\u2019s growth expectations depend on whether the government sticks to its spending plans, he adds.\u00a0<\/p>\n The government is also working on comprehensive solutions to the housing crisis. A plan for local governments and state-owned enterprises (SOEs) to buy unsold homes should help absorb inventory and prop up the ailing sector. Further, the PBoC has loosened restrictions on first-time buyers by lowering the minimum deposit to 15% from 25% and \u201cscrapping the mortgage rate floor for first and second home buyers.\u201d<\/p>\n As far as US tariffs on EVs and solar panels goes, Wu says the effect is likely to be minor given China only exports a small percentage of its EVs to the US and most Chinese solar panels are sold through intermediate countries without high tariffs.\u00a0<\/p>\n Gold price (XAU\/USD) is trading back up at key\u00a0resistance at $2,400.\u00a0<\/p>\n The precious metal has been rising in a channel since the May 2 lows, however, suggesting the short-term trend is bullish and more upside is eventually expected.\u00a0\u00a0<\/p>\n The Relative Strength Index (RSI) has fallen back out of the overbought zone, suggesting renewed potential for more upside.\u00a0<\/p>\n The break above $2,400 now makes it more likely Gold will rally to the next resistance level at $2,417 (the April 19 high), followed by $2,430 \u2013 the all-time high.\u00a0<\/p>\n The medium and long-term charts (daily and weekly) are also bullish, adding a supportive backdrop for Gold.\u00a0<\/p>\n Industrial output is released by the National Bureau of Statistics of China<\/a>. It shows the volume of production of Chinese Industries such as factories and manufacturing facilities. A surge in output is regarded as inflationary which would prompt the People\u2019s Bank of China<\/a> would tighten monetary policy and fiscal policy risk. Generally speaking, if high industrial production growth comes out, this may generate a positive sentiment (or bullish) for the CNY, whereas a low reading is seen as negative (or Bearish) for the CNY.<\/p>\nGold price rises after China data shows improvement\u00a0<\/h2>\n
Chinese growth \u201cuneven\u201d<\/h3>\n
Fiscal spending key<\/h3>\n
Impact of US tariffs minor<\/h3>\n
Technical Analysis: Gold price rising in channel<\/h2>\n
XAU\/USD 4-hour Chart<\/h3>\n
<\/a><\/h3>\n
Economic Indicator<\/h2>\n
Industrial Production (YoY)<\/h3>\n