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Global equity markets retain a bullish tone on Friday as investors’ concerns keep abating these days. Adding to an upbeat tone, fresh economic data out of the United States showed that inflation appeared to have peaked already, suggesting the Fed could take a more measured approach towards tightening after several aggressive steps. 

US annual core PCE inflation fell to 4.9% in April from 5.2%, in line with expectations. Also on the positive side, personal spending rose 0.9% on a monthly basis, above the expected drop to 0.7% from a 1.4% growth rate in the previous month. Strength in consumer spending helped ease worries about a dramatic slowdown in economic growth.

Still, the overall market reaction to the data was rather muted, with stocks holding onto gains while the dollar continued to oscillate around the flat-line after a brief dip to fresh one-month lows earlier in the day. The USD index holds below the 102.00 figure which represents the immediate upside target for dollar bulls at this stage. Of note, the greenback looks set to finish the second bearish week in a row, staying on the defensive since mid-May when the index was rejected from a twenty-year high of 105.00. 

Meanwhile, gold prices bounced off the 20-DMA once again, to regain the $1,860 zone that could pave the way towards this week’s highs around $1,870. However, it looks like the yellow metal will struggle to see a more robust advance in the near term as the US dollar holds relatively steady amid the risk-on tone that dominates global markets ahead of the weekend. In a wider picture, the bullion could regain the $1,900 level if the dollar index slips below the 100.00 psychological level in the days of weeks to come.