Gold prices have stabilised around $1940

After a strong surge at the start of the week fuelled by weak US economic data, gold prices have stabilised around $1940, after almost reaching one-month highs on Thursday.

Lower than expected GDP and second tier employment readings have hinted at a possible Fed halt to interest rate hikes.

As the result, investors are shifting their focus towards non-yielding, safer assets such as gold.

The Chinese government’s efforts to support its economy, with both manufacturing and non-manufacturing sectors slowing down, points towards an ongoing economic decline and further increases gold’s appeal as a safe haven asset.

Despite these recent positive developments for gold, bullion could remain under pressure as inflationary risks still remain.

From a technical perspective, gold is trading in between the 50- and 100-day SMA. A potential consolidation channel might occur between $1934 and $1949. The Relative Strength Index (RSI) is currently lying 10 points below the upper boundary (>70 denotes overbought territory), which could indicate potential further upside.