GOLD Price Analysis – April 09, 2024
Daily Price Outlook
Gold price (XAU/USD) has prolonged its bullish rally and hit an all-time high around the $2,348 level. However, this upward trend can be associated with multiple factors, including speculation surrounding US Federal Reserve policy, geopolitical tensions, and upcoming US Consumer Price Index (CPI) and the FOMC meeting minutes. Although, the gains in the gold price could fade as the previously released upbeat US jobs report, along with the recent hawkish remarks by Federal Reserve (Fed) officials, suggested that the US central bank could delay cutting interest rates. This tends to underpin the US dollar and cap gains in the gold price.
Impact of US Federal Reserve Speculation on Gold Prices
On the US front, the ongoing discussion regarding a potential interest rate cut by the US Federal Reserve tends to positively affect gold prices by weakening the US dollar, making gold more attractive to investors. Market experts anticipate a potential interest rate cut by the US Federal Reserve during the upcoming Federal Open Market Committee (FOMC) meeting from April 30th to May 1st, 2024.
On the other side, the upbeat US jobs report released on Friday, along with the recent hawkish remarks by Federal Reserve (Fed) officials, suggested that the US central bank could delay cutting interest rates.
Therefore, the speculation of a potential interest rate cut tends to lift gold prices by weakening the US dollar. However, upbeat US jobs data and hawkish Fed remarks could delay rate cuts, pressuring gold.
Geopolitical Tensions in the Middle East Drive Surge in Gold and Silver Prices
On the geopolitical front, the tensions in the Middle East remains on the cards as the hope for peace between Israel and Hamas faded quickly because their discussions stalled. Furthermore, Iran threatened to use military force against Israel because of an alleged attack on its embassy in Syria. This raises the risk of more tension and conflict in the Middle East, which bolstered Gold prices as investors seek safe-haven assets. This surge in demand has driven gold prices to reach new highs. According to the latest reports, at least 33,207 Palestinians have been killed and 75,933 wounded in Israeli attacks on Gaza since October 7.
Meanwhile, the situation escalated further after Israeli Prime Minister Benjamin Netanyahu announced a scheduled ground offensive in Gaza's Rafah, despite US opposition. This heightened geopolitical tensions, boosting gold prices as investors sought safe havens amid fears of escalating conflict and increased demand.
Impact of US Consumer Price Index (CPI) Data on Gold Prices
Moving ahead, the upcoming US Consumer Price Index (CPI) data will be crucial report for gold prices as stronger-than-expected CPI data could suggest higher inflationary pressures, prompting the Federal Reserve to adopt a more hawkish stance on monetary policy. This could potentially weaken the US dollar, making gold more attractive to investors. Conversely, weaker CPI data could reinforce expectations of a rate cut, leading to further gains in gold prices.
Apart from this, the upcoming release of the Federal Open Market Committee (FOMC) meeting minutes could significantly impact gold prices. Any indication of a potential interest rate cut could weaken the US dollar, boosting gold prices as investors seek safe-haven assets. Conversely, a more hawkish tone indicating a reluctance to cut rates could strengthen the dollar, putting downward pressure on gold.
GOLD (XAU/USD) - Technical Analysis
Gold's market stance on April 9 reveals a subtle uptick, with the price ascending to $2,345.54, marking a 0.26% increase. The pivot point at $2,328 suggests a bullish undertone, while immediate resistance is identified at $2,354. Further resistance levels are projected at $2,373 and $2,390. On the downside, support can be found at $2,302, followed by $2,273 and $2,248.
The Relative Strength Index (RSI) stands at 68, nearing overbought territory, which could signal a forthcoming price correction if the index surpasses 70. The 50-day Exponential Moving Average (EMA) at $2,271 indicates a solid upward trend over the medium term, reinforcing the gold market's bullish sentiment.
Given these dynamics, the recommended trading strategy involves entering long positions above $2,338, targeting a take-profit level at $2,373, and setting a stop loss at $2,313 to manage risk.
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