GOLD Price Analysis – May 09, 2023

Daily Price Outlook

The price of gold (XAU/USD) has risen slightly above the $2,000 mark and is up 0.12% intraday to around $2,023 at the moment. This comes after a two-day uptrend that helped to recover from heavy losses on Friday. The focus is on US inflation data which could give hints about the end of US interest rates.

On Monday, gold rose in anticipation of this week's inflation statistics. This followed the release of data indicating that US job growth had accelerated in April, demonstrating continued strength in the labor market. However, there is still a risk of a recession which could lead markets to factor in potential Fed rate cuts, prompting discretionary traders to invest in gold. Investors tend to favor non-yielding gold when interest rates are low and other assets are less competitive.

According to CME's FedWatch tool, markets see a 31% chance of a rate cut in July and an 85% chance of the Fed keeping rates at their current level. American banks have tightened their credit requirements in the early months of the year and experienced a decline in demand for loans from customers and businesses, according to the Fed's senior loan officer view survey. This has led some analysts to suggest that a credit crunch may be beginning.

Austan Goolsbee, the head of the Chicago Fed, has expressed concern that a credit crunch may be starting. Han Tan, chief market judge at Exinity, believes that if the issues facing restricted banks were to resurface, this could drive investors to seek the safety of gold.

Dealers are keeping an eye on the US consumer price index (CPI), which is due to be published on Wednesday, among other things.

GOLD – Technical Outlook

Gold prices are currently settled around the $2,020.00 level, with continuous positive support from the EMA50. The stochastic is beginning to gather positive momentum on the intraday time frames, which leads us to believe that there are valid chances for the rise to continue in the upcoming sessions.

Our first positive station target is set at $2,048.70, and breaching this level will push the price to $2,075.25 as the next target. However, breaking $2,002.00 represents a negative factor that will push the price to start a correctional bearish wave on an intraday basis.

The expected trading range for today is between $2,007.00 support and $2,045.00 resistance. Happy trading!