GOLD Price Analysis – May 05, 2023
Daily Price Outlook
Gold is currently trading at $2059, showing a 0.16% increase over the past 24 hours. After reaching its highest level in a year, the price of gold saw a correction but has since regained its bullish momentum and is poised for further gains.
The US Dollar Index, which measures the value of the greenback against a basket of six major currencies, is down 0.23% at 101.17. Meanwhile, the US Treasury yield on the 10-year bond is rising with an increase of 0.96% at 3.384.
The recovery of gold can be attributed to the failure of the US dollar to maintain its correction from the previous day. This is due to concerns over the rising US debt ceiling and the banking crisis.
The Federal Reserve's dovish rate hike, along with cautious comments about future rate hikes, has weighed heavily on the greenback, giving strength to the precious metal.
Furthermore, the ECB's announcement of a 25 basis point rate hike, which was in line with market expectations, also supported the bullish momentum of gold.
The European Central Bank also stated that it would increase the pace of its Asset Purchase Programme from 15 billion EUR to 25 billion EUR per month. Unlike the Federal Reserve, the ECB kept the door open for future rate hikes and did not offer any hints of a rate hike pause due to the uncontrolled inflation situation in the Eurozone economy.
Gold also gained strength from macroeconomic factors, including the US banking failure, debt ceiling expiration, and the improved growth outlook for Asian countries from the IMF. The International Monetary Fund's highly optimistic growth prospects for India and China favored gold prices as both countries are top consumers of gold.
On the economic data front, the US economic docket is scheduled to release one of the most important reports, Non-Farm Payroll, which is expected to be 181K in April.
Any value above this level would help the greenback gain strength against major rival currencies. Furthermore, the Unemployment Rate is also set to be released during the American trading session, which will be a key data point for traders to focus on.
GOLD Price Chart - Source: Tradingview
Daily Technical Levels
Support Resistance
1.0976 1.1081
1.0929 1.1139
1.0871 1.1186
Pivot Point: 1.1034
GOLD – Technical Outlook
The current gold price is attempting to surpass the major resistance level of $2,048.70, but it has been facing difficulty in maintaining a steady position above it. It is presently fluctuating between the support level of $2,030.00 and the resistance level, which is a crucial aspect to consider for determining the next trend of gold.
A definitive breakthrough of either level will indicate the upcoming destination for the price. If the resistance level is exceeded, we can anticipate that the price will maintain its upward momentum toward $2,100.00 levels.
Alternatively, if the support level breaks, the price may encounter negative pressure and fall towards the levels of $2,017.00, followed by $2,010.00. Today's trading range is estimated to be between the support level of $2,030.00 and the resistance level of $2,070.00.
Related:
* EUR/USD Price Analysis – May 05, 2023
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