GOLD Price Analysis – May 20, 2024
Daily Price Outlook
Gold prices (XAU/USD) have prolonged its winning streak and hovering around the $2,441 level, hitting the intraday high of 2,450 level. However, the reason behind this surge was the increasing speculations of potential Fed rate cuts.
Meanwhile, the escalating geopolitical tensions in the Middle East was seen as another key factor that put upward pressure on Gold prices.
Looking ahead, investors will closely watch the release of the Federal Open Market Committee (FOMC) minutes on Wednesday. These minutes are anticipated to reveal that policymakers emphasized their intention to keep interest rates restrictive for an extended period.
Impact of Fed Policy Expectations on Gold Prices
On the US front, the US dollar has experienced a decline, driven by expectations of Fed rate cuts. These expectations were fueled by recent statements from key Federal Reserve figures, including Bostic, Barr, Waller, Jefferson, and Mester, indicating a cautious approach to future monetary policy.
This sentiment has led investors to anticipate imminent rate cuts by the Fed, exerting a strong impact on gold prices.
Fed Governor Michelle Bowman has acknowledged that the current policy stance is restrictive, with high interest rates aimed at controlling inflation. Despite this, she is ready to raise rates further if inflation stagnates or reverses.
This has reinforced expectations for potential rate cuts. Financial markets have already factored in the likelihood of rate reductions, as futures markets show significant probabilities of cuts in the near future.
Therefore, the anticipation of Fed rate cuts has weakened the US dollar, driving investors towards gold as a safe-haven asset. This shift in investor sentiment has significantly boosted gold prices, as lower interest rates typically increase gold's attractiveness compared to interest-bearing assets.
Impact of Tragic Death of Iran's President and Foreign Minister on Gold Prices
On the geopolitical front, the escalating tensions in the Middle East have further boosted gold's safe-haven appeal. However, the latest report reveals that Iran's President Ebrahim Raisi and Foreign Minister Hossein Amirabdollahian tragically died in a helicopter crash in East Azerbaijan province.
Rescuers found the crash site after a difficult search in challenging weather. With the president's death, Iran's vice president will temporarily assume presidential duties. New elections will be held within 50 days to elect a new president.s.
Therefore, the escalating tensions in the Middle East, compounded by the tragic death of Iran's President Raisi and Foreign Minister Amirabdollahian, have significantly boosted gold's safe-haven appeal.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is trading at $2,438.545, up 0.98% on the day. The 4-hour chart identifies the pivot point at $2,439.93, which is crucial for near-term price action. Immediate resistance is seen at $2,450.19, followed by $2,460.97 and $2,471.53.
On the downside, immediate support lies at $2,430.76, with further support at $2,424.04 and $2,413.64.
The Relative Strength Index (RSI) is at 78, indicating that gold is in overbought territory and may be due for a correction. The 50-day Exponential Moving Average (EMA) is positioned at $2,381.09, reinforcing the overall bullish trend.
However, the RSI’s high value suggests caution, as prices may pull back from current levels.
The market is observing a significant level of resistance at the pivot point of $2,439.93. If gold fails to sustain above this level, a bearish correction could be triggered, potentially driving prices down to the support levels mentioned.
Traders should be vigilant around the $2,450.19 resistance, as a break above this could lead to further gains toward $2,460.97 and $2,471.53.
In the current scenario, the recommended strategy is to sell below $2,440, with a target of $2,417 and a stop loss at $2,453. This approach aligns with the technical indicators, which suggest a potential pullback due to overbought conditions.
The 50 EMA at $2,381.09 provides a solid support base, indicating that the bullish trend could resume once the market corrects from overbought levels.
In conclusion, while gold remains bullish above the $2,439.93 pivot point, caution is warranted due to the high RSI value. A break below this level can drive a sharp selling trend, while holding above could push prices towards higher resistance levels.
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GOLD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Gold (XAU/USD) is trading at $2,438.545, up 0.98%, with a key pivot point at $2,439.93.
- Immediate resistance levels are at $2,450.19, $2,460.97, and $2,471.53; support levels are at $2,430.76, $2,424.04, and $2,413.64.
- The RSI at 78 indicates overbought conditions, suggesting a potential correction; the 50-day EMA is at $2,381.09.
Gold (XAU/USD) is trading at $2,438.545, up 0.98% on the day. The 4-hour chart identifies the pivot point at $2,439.93, which is crucial for near-term price action. Immediate resistance is seen at $2,450.19, followed by $2,460.97 and $2,471.53.
On the downside, immediate support lies at $2,430.76, with further support at $2,424.04 and $2,413.64.
The Relative Strength Index (RSI) is at 78, indicating that gold is in overbought territory and may be due for a correction.
The 50-day Exponential Moving Average (EMA) is positioned at $2,381.09, reinforcing the overall bullish trend. However, the RSI’s high value suggests caution, as prices may pull back from current levels.
The market is observing a significant level of resistance at the pivot point of $2,439.93. If gold fails to sustain above this level, a bearish correction could be triggered, potentially driving prices down to the support levels mentioned.
Traders should be vigilant around the $2,450.19 resistance, as a break above this could lead to further gains toward $2,460.97 and $2,471.53.
In the current scenario, the recommended strategy is to sell below $2,440, with a target of $2,417 and a stop loss at $2,453. This approach aligns with the technical indicators, which suggest a potential pullback due to overbought conditions.
The 50 EMA at $2,381.09 provides a solid support base, indicating that the bullish trend could resume once the market corrects from overbought levels.
In conclusion, while gold remains bullish above the $2,439.93 pivot point, caution is warranted due to the high RSI value. A break below this level can drive a sharp selling trend, while holding above could push prices towards higher resistance levels.
GOLD (XAU/USD) - Trade Ideas
Entry Price – Sell Below 2440
Take Profit – 2417
Stop Loss – 2453
Risk to Reward – 1: 1.7
Profit & Loss Per Standard Lot = +$2300/ -$1300
Profit & Loss Per Mini Lot = +$230/ -$130
GOLD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Bullish Trend: Gold maintains a bullish trend above $2,376.154.
- Immediate Resistance: Key resistance levels to watch are $2,395.702 and $2,406.246.
- Support Levels: Immediate support is at $2,360.833, with further support at $2,347.332 and $2,331.560.
Gold is trading at $2,385.460, up 0.36% for the day, maintaining a bullish trajectory. The 4-hour chart shows a pivot point at $2,376.154, which serves as a critical support level. Immediate resistance is observed at $2,395.702, followed by $2,406.246 and $2,417.292.
These levels are key indicators for potential upward momentum, with the immediate resistance acting as a crucial barrier for further gains.
On the downside, immediate support is at $2,360.833, with additional support levels at $2,347.332 and $2,331.560. These support levels are vital for maintaining the bullish outlook, as a break below them could indicate a shift in market sentiment.
The 50-day Exponential Moving Average (EMA) at $2,348.267 provides further support, aligning closely with the current price and reinforcing the bullish trend.
The Relative Strength Index (RSI) is currently at 63, suggesting moderate bullish momentum. An RSI above 50 generally indicates an upward trend, but a level of 63 also hints at the approach of overbought conditions, warranting cautious optimism.
The formation of a bullish trend is supported by a series of higher highs and higher lows, along with strong buying interest above the pivot point of $2,376.154. However, traders should be vigilant for any signs of reversal, especially if the price fails to break through the immediate resistance levels.
In conclusion, the technical outlook for gold remains bullish above the pivot point of $2,376.154. An entry price for buying is recommended above $2,375, with a take profit target at $2,395 and a stop loss at $2,360. This strategy balances the potential for further gains against the risk of a downward correction.
GOLD (XAU/USD) - Trade Ideas
Entry Price – Buy Above 2375
Take Profit – 2395
Stop Loss – 2360
Risk to Reward – 1: 1.3
Profit & Loss Per Standard Lot = +$2000/ -$1500
Profit & Loss Per Mini Lot = +$200/ -$150
GOLD Price Analysis – May 17, 2024
Daily Price Outlook
Gold price (XAU/USD) has prolonged its winning streak and remained well bid around $2,383 level and hit an intraday high of around $2,387. However, this upward movement can be attributed to several factors, including ongoing geopolitical tension, which increased demand for precious metals like gold as a safe-haven asset.
In addition to this, the previously released softer-than-expected US inflation data in April triggered hope for rate cuts from the US Federal Reserve (Fed). This was seen as another key factor that boosting the gold price.
Looking ahead, traders are currently reluctant to make strong moves in the market because there isn't much significant economic data being released in the US at the moment.
Instead, they are paying close attention to speeches by Federal Reserve officials, such as Kashkari, Waller, and Daly, to gain potential insights into the future direction of the Fed's monetary policy.
Cautious Fed Comments and Mixed Economic Data Support Gold Prices Amid Uncertainty
On the US front, the broad-based US dollar lost some of its traction and remained under pressure on the back of softer-than-expected inflation data in April, which raised hopes for Federal Reserve (Fed) rate cuts and boosted precious metals like gold.
In contrast to the earlier hopes for rate cuts, recent comments from Federal Reserve officials suggest a more cautious approach, indicating they may not rush to lower interest rates. Atlanta Fed President Raphael Bostic acknowledged signs of cooling inflation but stated that he wants to see more data before making any decisions.
In the meantime, Cleveland Fed President Loretta Mester believes the current policy is appropriate as it is. Richmond Fed President Tom Barkin emphasized the need to keep borrowing costs high for a longer period.
Despite these cautious stances, financial markets are predicting a 75% chance of a Fed rate cut in September and expect full rate cuts by the end of the year.
On the data front, US weekly Initial Jobless Claims climbed to 222K for the week ending May 11, surpassing the 220K estimate provided by the US Bureau of Labor Statistics (BLS).
Meanwhile, Housing Starts saw a 5.7% month-over-month increase in April, reaching 1.36 million, but Building Permits fell by 3% month-over-month to 1.44 million in the same month.
Therefore, the mixed economic data and cautious Fed stance have created uncertainty, supporting gold prices as investors seek safe-haven assets amid concerns over the pace of the economic recovery.
GOLD (XAU/USD) - Technical Analysis
Gold is trading at $2,385.460, up 0.36% for the day, maintaining a bullish trajectory. The 4-hour chart shows a pivot point at $2,376.154, which serves as a critical support level. Immediate resistance is observed at $2,395.702, followed by $2,406.246 and $2,417.292.
These levels are key indicators for potential upward momentum, with the immediate resistance acting as a crucial barrier for further gains.
On the downside, immediate support is at $2,360.833, with additional support levels at $2,347.332 and $2,331.560. These support levels are vital for maintaining the bullish outlook, as a break below them could indicate a shift in market sentiment.
The 50-day Exponential Moving Average (EMA) at $2,348.267 provides further support, aligning closely with the current price and reinforcing the bullish trend.
The Relative Strength Index (RSI) is currently at 63, suggesting moderate bullish momentum. An RSI above 50 generally indicates an upward trend, but a level of 63 also hints at the approach of overbought conditions, warranting cautious optimism.
The formation of a bullish trend is supported by a series of higher highs and higher lows, along with strong buying interest above the pivot point of $2,376.154. However, traders should be vigilant for any signs of reversal, especially if the price fails to break through the immediate resistance levels.
In conclusion, the technical outlook for gold remains bullish above the pivot point of $2,376.154. An entry price for buying is recommended above $2,375, with a take profit target at $2,395 and a stop loss at $2,360. This strategy balances the potential for further gains against the risk of a downward correction.
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GOLD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Gold trades at $2388.545, up 0.12%, with key resistance at $2406.25.
- RSI at 69 indicates nearing overbought conditions, suggesting potential bearish correction.
- Strategic sell below $2395 with take-profit at $2375 and stop-loss at $2405.
Gold (XAU/USD) is currently trading at $2388.545, up 0.12% over the previous session. The 4-hour chart reveals key price levels and technical indicators, providing a detailed view of potential market movements.
The pivot point is at $2395.45. Immediate resistance levels are set at $2406.25, $2417.29, and $2429.08. On the downside, immediate support levels are at $2375.32, $2360.83, and $2347.33.
These levels are crucial for traders to watch as they provide insight into possible breakout or breakdown points.
The Relative Strength Index (RSI) is currently at 69, indicating that the market is nearing overbought conditions. This could suggest that a bearish correction is imminent if the buying pressure does not sustain.
The 50-day Exponential Moving Average (EMA) is at $2341.33, which supports the overall bullish trend in the medium term.
Given these technical factors, a strategic approach to trading gold at this juncture is essential. The current market conditions suggest that selling below the pivot point of $2395 could be advantageous, targeting a take-profit level of $2375 and setting a stop-loss at $2405.
This strategy is based on the expectation that if gold fails to breach the immediate resistance level, it is likely to correct downward toward the support levels.
The current bullish momentum in gold is supported by several factors, including a weaker US dollar and heightened expectations of a Federal Reserve rate cut. These macroeconomic factors have historically supported gold prices, making it a favorable asset during times of economic uncertainty and lower interest rates.
However, traders should remain cautious. The RSI nearing overbought territory and the proximity of significant resistance levels suggest that the upward momentum could face challenges. A failure to breach the resistance at $2406.25 could lead to a pullback towards the support at $2375.32 or even lower.
In summary, while gold (XAU/USD) is showing signs of bullish momentum, technical indicators suggest that a bearish correction could be on the horizon. Entry strategies should consider selling below $2395 with a take-profit target at $2375 and a stop-loss at $2405.
GOLD (XAU/USD) - Trade Ideas
Entry Price – Sell Below 2395
Take Profit – 2375
Stop Loss – 2405
Risk to Reward – 1: 1.2
Profit & Loss Per Standard Lot = +$2000/ -$1000
Profit & Loss Per Mini Lot = +$200/ -$100
GOLD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Pivot Point at $2,362.57 is crucial for determining bullish or bearish bias.
- Immediate Resistance Levels: $2,378.22, $2,389.35, $2,403.83.
- Immediate Support Levels: $2,352.71, $2,346.77, $2,337.10.
Gold is currently trading at $2,357.26, down 0.03% for the day. On the 4-hour chart, key price levels suggest potential movements. The pivot point, marked by the green line, is at $2,362.57, a critical level for traders to watch.
Immediate resistance is located at $2,378.22, followed by $2,389.35 and $2,403.83. If gold breaks through these resistance levels, it could signal further bullish momentum. Conversely, immediate support is found at $2,352.71, with additional support levels at $2,346.77 and $2,337.10. Should gold fall below these levels, it may indicate a bearish trend.
Technical indicators provide further insights. The Relative Strength Index (RSI) stands at 60, suggesting that gold is in a slightly bullish territory but not yet overbought. The 50-day Exponential Moving Average (EMA) is at $2,347.60, closely aligning with the current price, indicating that recent price movements are in line with the medium-term trend.
The overall technical outlook for gold remains cautiously bullish above the pivot point of $2,362.57. A break above this level could prompt further buying interest, targeting the immediate resistance levels. However, if gold fails to hold above the pivot point, it may test the immediate support levels, potentially leading to increased selling pressure.
Conclusion: The recommended entry price for a buy limit is $2,352, with a take profit target at $2,370 and a stop loss at $2,345.
GOLD (XAU/USD) - Trade Ideas
Entry Price – Buy Limit 2352
Take Profit – 2370
Stop Loss – 2345
Risk to Reward – 1: 2.5
Profit & Loss Per Standard Lot = +$637/ -$422
Profit & Loss Per Mini Lot = +$63/ -$42
GOLD Price Analysis – May 16, 2024
Daily Price Outlook
Gold price (XAU/USD) continued its upward momentum, maintaining strong bids around $2,382 and reaching an intraday peak of $2,397. This surge can be attributed to the weakening of the US dollar, which lost ground following the release of the latest Consumer Price Index (CPI) report. The report indicated a slowdown in inflation in the US during April, prompting investors to anticipate potential interest rate cuts by the Federal Reserve (Fed) later this year.
Looking ahead, market participants are closely monitoring several key economic indicators, including US Building Permits, Housing Starts, weekly Initial Jobless Claims, the Philly Fed Manufacturing Index, and Industrial Production, all scheduled for release on Thursday. Furthermore, investors are awaiting remarks from Fed officials Barr, Harker, Mester, and Bostic on the same day.
However, it's worth noting that any hawkish commentary from these officials could strengthen the US dollar and limit the upside potential of the precious metal in the short term.
Impact of US CPI Data on Federal Reserve Policy and Gold Prices
In the United States, the value of the US dollar declined as the recent release of subdued CPI inflation figures bolstered expectations for a potential reduction in interest rates by the Federal Reserve. This optimism surrounding a Fed rate cut contributed to the upward movement of precious metals such as gold.
Neel Kashkari, as President of the Federal Reserve Bank of Minneapolis, emphasized the need for careful economic monitoring to assess whether current policy rates are too restrictive. This has led to a shift in financial market projections, with CME's FedWatch Tool now suggesting a 75% chance of a Fed rate cut happening in September 2024, up from the previous 65% probability before the CPI report.
On the data front, the US Consumer Price Index (CPI) for April showed a year-over-year (YoY) increase of 3.4%, slightly lower than March's 3.5%, which aligned with market expectations. The monthly CPI inflation rate decreased to 0.3% from 0.4%, below the anticipated 0.4%. Excluding volatile items like food and energy, core CPI rose by 3.6% YoY, down from the previous 3.8%, with monthly core CPI also easing to 0.3% from 0.4%. In addition, US Retail Sales remained stagnant at 0% month-over-month (MoM) in April, in contrast to March's 0.6% rise and falling short of the estimated 0.4%.
Hence, the subdued Consumer Price Index (CPI) figures in the United States fueled optimism for a potential Federal Reserve interest rate reduction, which in turn weakened the US dollar and propelled gold prices higher.
Positive Trend in Global Gold Demand Driving Prices Higher
Another factor that has been boosting the gold price is the positive trend in global gold demand, as highlighted in the World Gold Council's Q1 2024 report. The report revealed a notable 3% increase in global gold demand, reaching 1,238 tonnes. This surge marks the strongest first quarter performance since 2016, indicating a significant uptick in appetite for the precious metal worldwide. The rise in demand underscores gold's enduring appeal as a safe haven asset and store of value, particularly in uncertain economic times.
Investors and institutions alike are increasingly turning to gold as a hedge against inflation, currency fluctuations, and geopolitical tensions, further bolstering its market position and driving prices higher.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is currently trading at $2388.545, up 0.12% over the previous session. The 4-hour chart reveals key price levels and technical indicators, providing a detailed view of potential market movements.
The pivot point is at $2395.45. Immediate resistance levels are set at $2406.25, $2417.29, and $2429.08. On the downside, immediate support levels are at $2375.32, $2360.83, and $2347.33.
These levels are crucial for traders to watch as they provide insight into possible breakout or breakdown points.
The Relative Strength Index (RSI) is currently at 69, indicating that the market is nearing overbought conditions. This could suggest that a bearish correction is imminent if the buying pressure does not sustain.
The 50-day Exponential Moving Average (EMA) is at $2341.33, which supports the overall bullish trend in the medium term.
Given these technical factors, a strategic approach to trading gold at this juncture is essential. The current market conditions suggest that selling below the pivot point of $2395 could be advantageous, targeting a take-profit level of $2375 and setting a stop-loss at $2405.
This strategy is based on the expectation that if gold fails to breach the immediate resistance level, it is likely to correct downward toward the support levels.
The current bullish momentum in gold is supported by several factors, including a weaker US dollar and heightened expectations of a Federal Reserve rate cut. These macroeconomic factors have historically supported gold prices, making it a favorable asset during times of economic uncertainty and lower interest rates.
However, traders should remain cautious. The RSI nearing overbought territory and the proximity of significant resistance levels suggest that the upward momentum could face challenges. A failure to breach the resistance at $2406.25 could lead to a pullback towards the support at $2375.32 or even lower.
In summary, while gold (XAU/USD) is showing signs of bullish momentum, technical indicators suggest that a bearish correction could be on the horizon. Entry strategies should consider selling below $2395 with a take-profit target at $2375 and a stop-loss at $2405.
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GOLD Price Analysis – May 15, 2024
Daily Price Outlook
Gold price (XAU/USD) continued its upward momentum and remained well bid around the $2,362 level, reaching an intraday high of $2,363. The reason for its bullish trend can be attributed to strong global demand for the precious metal. According to the World Gold Council's Q1 2024 report, global gold demand rose by 3% to 1,238 tones, making it the strongest first quarter since 2016. This increase in demand further fueled the upward trend of gold. Meanwhile, increasing tension in the Middle East was seen as one of the factors supporting gold's upward trend.
In contrast to this, Federal Reserve (Fed) officials' hawkish remarks and previously released upbeat US Producer Price Index (PPI) boosted the US dollar and capped further gains in the gold price. However, the rise in the Producer Price Index (PPI) and Core PPI suggests increasing inflationary pressures, which lead to expectations of tighter monetary policy by the Federal Reserve.
Impact of Stronger US Dollar & Hawkish Stance on Gold Prices
Despite the risk-on market sentiment, the US dollar has been showing bullish bias, mainly backed by the Federal Reserve's hawkish stance and recent positive economic indicators. On the data front, the Producer Price Index (PPI) surged 2.2% year-over-year in April, indicating mounting inflationary pressures, with the Core PPI rising by 2.4%.
As in result, Fed Chair Jerome Powell is saying that inflation is sticking around for longer than they thought, so they might need to keep interest rates higher for a longer time. On the other hand, Kansas City Fed President Jeffrey Schmid is warning that inflation is still high, suggesting the central bank might need to do more to manage it.
Looking ahead, it is expected that the annual Consumer Price Index (CPI) inflation will ease slightly in April, with the headline CPI anticipated to decrease to 3.4% and the Core CPI to 3.6%. Additionally, US Retail Sales are projected to decline in April. Financial markets are currently factoring in the probability of a Fed rate cut in September 2024.
Despite the stronger US dollar and the Fed's hawkish stance, gold prices are gaining momentum due to heightened demand for the precious metal as a safe-haven asset amidst mounting inflationary pressures and geopolitical tensions.
Escalating Gaza Conflict Sparks Global Market Uncertainty, Surge in Safe-Haven Gold Prices
On the geopolitical front, the ongoing conflict between Israeli forces and Palestinian armed groups in Gaza shows no signs of slowing down, resulting in a high number of casualties, including civilians. It should also be noted that Israeli airstrikes have caused extensive destruction and forced hundreds of thousands of Palestinians to leave their homes. Consequently, the ongoing conflict in Gaza contributes to uncertainty in global markets, prompting investors to seek safe-haven assets like Gold.
GOLD (XAU/USD) - Technical Analysis
Gold is currently trading at $2,357.26, down 0.03% for the day. On the 4-hour chart, key price levels suggest potential movements. The pivot point, marked by the green line, is at $2,362.57, a critical level for traders to watch.
Immediate resistance is located at $2,378.22, followed by $2,389.35 and $2,403.83. If gold breaks through these resistance levels, it could signal further bullish momentum. Conversely, immediate support is found at $2,352.71, with additional support levels at $2,346.77 and $2,337.10. Should gold fall below these levels, it may indicate a bearish trend.
Technical indicators provide further insights. The Relative Strength Index (RSI) stands at 60, suggesting that gold is in a slightly bullish territory but not yet overbought. The 50-day Exponential Moving Average (EMA) is at $2,347.60, closely aligning with the current price, indicating that recent price movements are in line with the medium-term trend.
The overall technical outlook for gold remains cautiously bullish above the pivot point of $2,362.57. A break above this level could prompt further buying interest, targeting the immediate resistance levels. However, if gold fails to hold above the pivot point, it may test the immediate support levels, potentially leading to increased selling pressure.
Conclusion: The recommended entry price for a buy limit is $2,352, with a take profit target at $2,370 and a stop loss at $2,345.
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GOLD Price Analysis – May 14, 2024
Daily Price Outlook
Despite the bullish US dollar and hawkish Fed stance regarding interest rates, the safe-haven gold maintained its upward trend and edged higher around the 2,345.73 level, hitting an intra-day high of 2,348.28.
The reason for its upward trend can be attributed to increasing geopolitical tensions, which continue to stoke demand for the safe-haven asset.
Meanwhile, Gita Gopinath from the IMF warned that countries are reconsidering their trade partners, which could lead to a retreat from global trade rules. Western sanctions on nations like Russia and Iran contribute to this trend.
As a result, investors and central banks are increasingly turning to gold as a safe asset, potentially driving up its price.
Furthermore, the decision by BRICS nations to use less of the US dollar in international trade has increased the demand for gold as an alternative. This shift, along with non-Western central banks increasing their gold reserves, is reducing reliance on the US dollar.
US Dollar Strength and Potential Impact on Gold Prices
On the US front, the broad-based US dollar continued its upward trend, staying bullish due to cautious remarks from Federal Reserve officials about keeping interest rates high to tackle persistent inflation.
Fed Vice Chair Philip Jefferson emphasized the need to maintain current rates until signs of inflation easing appear.
Investors are closely monitoring the Producer Price Index (PPI) as it could impact future market trends. Consumer sentiment surveys suggest US consumers anticipate inflation to reach 3.3% in the coming year.
While Minneapolis Fed President Neel Kashkari expressed concerns about monetary policy restrictiveness, rate hikes are still a possibility. San Francisco Fed President Mary Daly emphasized the necessity of maintaining a prolonged restrictive policy to achieve the Federal Reserve's inflation targets.
On the data front, consumer sentiment in the US took a hit in May, dropping to 67.4 from April's 77.2, the lowest in six months, and below market expectations. Meanwhile, consumer inflation expectations rose slightly to 3.1%, hitting a six-month high.
Looking ahead, the US Producer Price Index (PPI) for April is expected to rise by 2.2% compared to last year, with Core PPI likely increasing by 2.4%. Additionally, Consumer Price Index (CPI) inflation is forecasted to ease to 3.4% from the previous 3.5%, while Core CPI inflation is expected to drop to 3.6% from March's 3.8%.
Therefore, the bullish US dollar, driven by cautious Fed remarks on inflation, pressures gold prices as investors eye PPI data for economic cues.
Geopolitical Tension in the Middle East and Potential Impact on Gold Prices
On the geopolitical front, tension in the Middle East intensified as the Israeli military carried out multiple deadly attacks across the Gaza Strip. It should be noted that these attacks resulted in civilian casualties, including children.
The UN chief condemned the killing of a foreign staff member in Israel's actions and called for a full investigation.
Israeli forces also ordered the evacuation of medical staff from Rafah's Kuwaiti Hospital, raising concerns about the collapse of Gaza's healthcare system. However, the death toll from Israeli attacks on Gaza since October 7 has reached 35,173, with thousands wounded.
Therefore, the heightened tension in the Middle East following Israeli military attacks in Gaza may increase uncertainty, potentially driving up gold prices. Investors often turn to gold as a safe-haven asset during geopolitical instability, which could lead to increased demand and upward pressure on its price.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is trading at $2339.040, up 0.31%, reflecting a slight recovery from recent dips. The 4-hour chart indicates a pivot point at $2333.49. Immediate resistance levels are set at $2356.91, $2378.70, and $2401.14, while support levels are identified at $2307.47, $2286.32, and $2267.78.
Technical indicators provide further insight into the current market conditions. The Relative Strength Index (RSI) is neutral at 50, indicating neither overbought nor oversold conditions.
The 50-day Exponential Moving Average (EMA) stands at $2324.65, suggesting a support level slightly below the current price, which can act as a cushion in the event of downward pressure.
Given the current technical setup, the strategy involves an entry price for selling below $2332, with a take-profit target at $2355 and a stop loss at $2320. This approach considers the potential for gold to face resistance at higher levels while acknowledging the support provided by the 50 EMA.
A break above the immediate resistance at $2356.91 could indicate further bullish momentum, pushing prices toward the next resistance levels of $2378.70 and $2401.14.
Conversely, if gold falls below the pivot point of $2333.49, the immediate support at $2307.47 and subsequent levels at $2286.32 and $2267.78 will be crucial to watch. Overall, gold's outlook remains cautiously bullish above the pivot point of $2333.49.
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GOLD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Gold (XAU/USD) trading at $2339.040, up 0.31%
- Pivot point at $2333.49 with immediate resistance at $2356.91
- Entry price for selling below $2332, with take profit at $2355 and stop loss at $2320
Gold (XAU/USD) is trading at $2339.040, up 0.31%, reflecting a slight recovery from recent dips. The 4-hour chart indicates a pivot point at $2333.49. Immediate resistance levels are set at $2356.91, $2378.70, and $2401.14, while support levels are identified at $2307.47, $2286.32, and $2267.78.
Technical indicators provide further insight into the current market conditions. The Relative Strength Index (RSI) is neutral at 50, indicating neither overbought nor oversold conditions. The 50-day Exponential Moving Average (EMA) stands at $2324.65, suggesting a support level slightly below the current price, which can act as a cushion in the event of downward pressure.
Given the current technical setup, the strategy involves an entry price for selling below $2332, with a take-profit target at $2355 and a stop loss at $2320. This approach considers the potential for gold to face resistance at higher levels while acknowledging the support provided by the 50 EMA.
A break above the immediate resistance at $2356.91 could indicate further bullish momentum, pushing prices toward the next resistance levels of $2378.70 and $2401.14.
Conversely, if gold falls below the pivot point of $2333.49, the immediate support at $2307.47 and subsequent levels at $2286.32 and $2267.78 will be crucial to watch. Overall, gold's outlook remains cautiously bullish above the pivot point of $2333.49.
GOLD (XAU/USD) - Trade Ideas
Entry Price – Sell Below 2332
Take Profit – 2355
Stop Loss – 2320
Risk to Reward – 1: 1.9
Profit & Loss Per Standard Lot = +$2300/ -$1200
Profit & Loss Per Mini Lot = +$230/ -$1200