GOLD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Gold prices edged up to $2,334.76, hovering near the pivot point of $2,328.74.
- Key resistance and support levels set between $2,220.76 and $2,444.27, defining potential market movements.
- Current technical indicators suggest a neutral market, recommending cautious entry above $2,328 for potential gains.
On April 26, the price of gold marginally increased to $2,334.76, up 0.17%, reflecting modest market movements amidst varying global economic signals. Currently, the pivot point is set at $2,328.74, which serves as a crucial juncture for determining the metal's short-term trajectory.
Gold's immediate resistance lies at $2,356.18, with subsequent levels at $2,400.53 and $2,444.27. These resistance points are crucial markers that could dictate the pace of price ascensions if surpassed. Conversely, support levels are established at $2,292.92, $2,253.78, and $2,220.76. A breach below these could suggest a bearish turn, pressuring gold prices further.
From a technical perspective, the Relative Strength Index (RSI) at 50 indicates a balanced market condition, neither overbought nor oversold, suggesting that gold is currently in a state of equilibrium between buyers and sellers. Additionally, the 50-Day Exponential Moving Average (EMA) stands at $2,340.20, slightly above the current price, suggesting slight bearish pressure but also potential for upward movement if gold breaks through this average.
Given these indicators, the recommended trading strategy would be to initiate a buy above the pivot point of $2,328, with a target profit at $2,380 and a stop loss at $2,290.
GOLD (XAU/USD) - Trade Ideas
Entry Price – Buy Above 2328
Take Profit – 2380
Stop Loss – 2290
Risk to Reward – 1: 1.6
Profit & Loss Per Standard Lot = +$5200/ -$3800
Profit & Loss Per Mini Lot = +$520/ -$380
GOLD Price Analysis – April 26, 2024
Daily Price Outlook
Gold price (XAU/USD) succeeded in halting its downward rally and turned bullish around the $2,346 level, reaching an intraday high of $2,350.20. However, the reason for its upward trend can be associated with the mild weakness in the US dollar, which underpinned the gold as it becomes cheaper for holders of other currencies. Furthermore, the US Gross Domestic Product (GDP) report for the first quarter of 2024 indicated a notable slowdown in economic growth and an increase in inflation, which was seen as negative for gold prices, as investors may seek alternative assets to hedge against economic uncertainty.
On the flip side, the expectation that the Federal Reserve will maintain higher interest rates due to persistent inflation is supporting demand for the US dollar, which could limit losses and cap gains in the gold price. Traders prefer to wait for more cues about the Federal Reserve's rate cut path before taking a strong position.
Impact of US Economic Data and Federal Reserve Expectations on Gold Prices
Despite hawkish comments from Fed officials, the broad-based US dollar has experienced a downtick amid disappointing GDP growth and higher-than-expected inflation figures, providing some support to gold prices. On the data front, the US economy grew slower than expected in the first quarter of 2024, expanding by only 1.6%, compared to the previous 3.4%. This was below market expectations of 2.5%.
Despite sluggish growth, prices remained high, with the Personal Consumption Expenditures Price Index climbing by 3.4% annually, surpassing the Fed's 2% target. As a result, the US dollar fell to a two-week low around mid-105.00, following the release of disappointing GDP growth and higher-than-expected inflation figures.
Therefore, the modest downtick in the US dollar, driven by disappointing GDP growth and higher-than-expected inflation, has provided support to gold prices amid upbeat economic data and hawkish Fed comments.
Meanwhile, the financial markets are not expecting the US Federal Reserve to cut interest rates in June, with less than a 10% chance priced in. The probability of a rate cut in September is also low, dropping below 58%. Investors are eagerly awaiting another inflation report due on Friday, which is expected to show a 0.3% monthly increase in both headline and core Personal Consumption Expenditures (PCE). Yearly estimates suggest a 2.6% rise in headline PCE and a 2.7% increase in Core PCE, indicating ongoing inflation concerns.
Consequently, the low expectations for US Federal Reserve rate cuts and ongoing inflation concerns, as indicated by upcoming inflation reports, may support gold prices amid market uncertainty and inflation worries.
Geopolitical Tensions in the Middle East and Gold Prices
On the geopolitical front, tensions in the Middle East have cooled slightly but remain a concern. The eastern part of Rafah is experiencing constant artillery shelling amid Israeli plans for a ground invasion, despite international warnings. The United Nations is seeking legal possession of evidence from Gaza's mass graves for potential investigations, with the Palestinian Civil Defence offering cooperation. In response to President Biden's announcement, the US has initiated pier construction in Gaza for maritime aid delivery. Hamas has expressed willingness to release captives but insists on a ceasefire as a condition.
Therefore, the ongoing tensions in the Middle East, highlighted by the situation in Rafah and Israeli plans for a ground invasion, alongside international concerns and humanitarian efforts, may contribute to market uncertainty and potentially support gold prices as a safe-haven asset.
GOLD (XAU/USD) - Technical Analysis
On April 26, the price of gold marginally increased to $2,334.76, up 0.17%, reflecting modest market movements amidst varying global economic signals. Currently, the pivot point is set at $2,328.74, which serves as a crucial juncture for determining the metal's short-term trajectory.
Gold's immediate resistance lies at $2,356.18, with subsequent levels at $2,400.53 and $2,444.27. These resistance points are crucial markers that could dictate the pace of price ascensions if surpassed. Conversely, support levels are established at $2,292.92, $2,253.78, and $2,220.76. A breach below these could suggest a bearish turn, pressuring gold prices further.
From a technical perspective, the Relative Strength Index (RSI) at 50 indicates a balanced market condition, neither overbought nor oversold, suggesting that gold is currently in a state of equilibrium between buyers and sellers. Additionally, the 50-Day Exponential Moving Average (EMA) stands at $2,340.20, slightly above the current price, suggesting slight bearish pressure but also potential for upward movement if gold breaks through this average.
Given these indicators, the recommended trading strategy would be to initiate a buy above the pivot point of $2,328, with a target profit at $2,380 and a stop loss at $2,290.
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GOLD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Gold is positioned just under a key pivot point at $2332.535, suggesting potential upward resistance or downward support tests.
- Technical indicators including an RSI of 40 and a 50 EMA at $2357.463 hint at possible resistance challenges ahead.
- Recommended strategy involves a sell limit order at $2330, targeting a take profit at $2297 with a stop loss at $2345 to mitigate risks.
As of today, gold is modestly up, trading at $2318.095, a 0.10% increase. The precious metal is currently navigating around a critical juncture on the four-hour chart, which gives us several insights into potential future movements.
Gold's current price is slightly below its pivot point at $2332.535, indicating that the bulls have yet to take full control. If they do, immediate resistance can be found at $2346.215, followed by further barriers at $2359.266 and $2382.859. These levels are essential for traders to monitor, as a break above could signal a continuation of the upward trend.
Conversely, if the price begins to descend, there is immediate support located at $2290.910. Additional support is found lower at $2268.205 and $2244.573. These marks could serve as crucial floors that, if broken, may accelerate declines in the gold price.
The technical indicators add depth to our analysis. The Relative Strength Index (RSI) stands at 40, which points to neither an overbought nor an oversold market, suggesting that there is potential room for movement in either direction. Meanwhile, the 50-day Exponential Moving Average (EMA) at $2357.463, which lies above the current price, acts as a resistance level that gold might strive to surpass in the upcoming sessions.
Considering the current market setup, a cautious trading strategy would be advisable. Placing a sell limit order at $2330 with a take profit target at $2297 and a stop loss at $2345 could capitalize on potential downward movements while managing risk effectively.
GOLD (XAU/USD) - Trade Ideas
Entry Price – Sell Limit 2330
Take Profit – 2297
Stop Loss – 2345
Risk to Reward – 1: 2.2
Profit & Loss Per Standard Lot = +$3300/ -$1500
Profit & Loss Per Mini Lot = +$330/ -$150
GOLD Price Analysis – April 25, 2024
Daily Price Outlook
Gold price (XAU/USD) was able to stop its downward rally and turned bullish around the $2,325 level, hitting an intraday high of $2,328.85. However, the reason for its upward trend can be attributed to the modest weakness in the US Dollar, which tends to benefit gold as it becomes cheaper for holders of other currencies.
Furthermore, a softer tone in equity markets has also contributed to the positive sentiment towards gold. Traders prefer to wait for more cues about the Federal Reserve's rate cut path before placing a strong position. Moving ahead, traders will keep an eye on important US economic data like the Q1 GDP report today and the PCE Price Index on Friday.
Modest USD Downtick and its Impact on Gold Price
Despite the upbeat US economic data and hawkish comments from Fed officials, the broad-based US dollar has experienced a modest downtick, providing some support to gold prices. However, the weaker dollar makes gold more affordable for holders of other currencies, leading to increased demand for the precious metal. However, the upside for gold remains limited as investors await more clarity on the Federal Reserve's rate-cutting cycle. Moving on, the focus is on key US macroeconomic data, including the Advance Q1 GDP report and the PCE Price Index, which will influence the direction of the US Dollar and, consequently, the price of gold.
On the data front, the US Census Bureau's latest report showed that in March, orders for durable goods increased by 2.6%, marking a positive sign for manufacturing. Excluding transportation, new orders rose by 0.2%. Besides, the Advance US GDP report, expected later today, is forecasted to reveal a growth rate of 2.5% for the first quarter, down from the previous 3.4%.
On the flip side, the Federal Reserve plans to maintain higher interest rates for a longer period due to ongoing inflation. This decision comes after robust US consumer inflation data and hawkish remarks from Fed officials. This was seen as one of the key factors that cap losses in the US dollar and limit the upside momentum of gold.
Geopolitical Tensions Ease, Decreasing Demand for Safe-Haven Assets
On the geopolitical front, tensions in the Middle East have cooled down, making investors less anxious about risks. This positive change in sentiment has decreased the appeal of safe-haven assets like gold. As a result, people are now more interested in investing in riskier options such as stocks or real estate.
Iran has also reduced its military presence in southern Syria after Israeli strikes, which has calmed concerns and improved market stability. This reduction in tension between Iran and Israel is good news for markets, as it lowers the risk of further conflict, giving investors more confidence and causing less demand for safe-haven assets like gold, which in turn lowers its price.
GOLD (XAU/USD) - Technical Analysis
As of today, gold is modestly up, trading at $2318.095, a 0.10% increase. The precious metal is currently navigating around a critical juncture on the four-hour chart, which gives us several insights into potential future movements.
Gold's current price is slightly below its pivot point at $2332.535, indicating that the bulls have yet to take full control. If they do, immediate resistance can be found at $2346.215, followed by further barriers at $2359.266 and $2382.859. These levels are essential for traders to monitor, as a break above could signal a continuation of the upward trend.
Conversely, if the price begins to descend, there is immediate support located at $2290.910. Additional support is found lower at $2268.205 and $2244.573. These marks could serve as crucial floors that, if broken, may accelerate declines in the gold price.
The technical indicators add depth to our analysis. The Relative Strength Index (RSI) stands at 40, which points to neither an overbought nor an oversold market, suggesting that there is potential room for movement in either direction. Meanwhile, the 50-day Exponential Moving Average (EMA) at $2357.463, which lies above the current price, acts as a resistance level that gold might strive to surpass in the upcoming sessions.
Considering the current market setup, a cautious trading strategy would be advisable. Placing a sell limit order at $2330 with a take profit target at $2297 and a stop loss at $2345 could capitalize on potential downward movements while managing risk effectively.
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GOLD Price Analysis – April 24, 2024
Daily Price Outlook
Gold price (XAU/USD) failed to stop its downward rally and remained well-offered around the $2,313.91 level, hitting the intraday low of $2,312.53. However, the reason for its downward trend can be attributed to the renewed strength of the US dollar, which gained traction despite the disappointing release of the US PMIs, suggesting that the economic upturn lost momentum at the start of the second quarter. Another factor weighing on the gold price was the risk-on market sentiment, supported by easing geopolitical tensions. However, the diminishing fears about further escalation of tensions in the Middle East turned out to be a key factor that continues to undermine the safe-haven precious metal.
Stronger US Dollar and Slower Economic Growth Drive Down Gold Prices
On the US front, the broad-based US dollar has been gaining momentum due to expectations that the Federal Reserve will keep interest rates high for a longer period because of persistent inflation, which is weighing down on gold prices. On the data front, the S&P Global Composite PMI fell to 50.9 in April's flash estimate, indicating that US private sector business activity grew at a slower pace. At the same time, the Manufacturing PMI unexpectedly entered contraction territory, and the Services PMI dropped from 51.7 in March to 50.9, signaling reduced economic momentum.
Therefore, the stronger US dollar, combined with a slower pace of US private sector growth and a contracting manufacturing sector, contributes to downward pressure on gold prices, reducing its appeal as a safe-haven asset.
Moving ahead, traders are focusing on the US economic docket, which features Durable Goods Orders, but the primary focus remains on the Advance Q1 GDP report and the Personal Consumption Expenditures (PCE) Price Index.
Geopolitical De-Escalation Between Israel and Iran Contributes to Gold Price Decline
On the geopolitical front, ongoing conflicts, particularly between Israel and Iran, are showing signs of slowing down, boosting market sentiment and contributing to gold's decline. While the tensions between Israel and Iran raise fears of a wider conflict, a full-scale war seems unlikely as both nations aim to avoid escalation. Iran supports groups like Hezbollah but denies direct involvement in recent attacks on Israel. Israel's retaliatory strikes are strategic, inflicting more damage on Iran's proxies.
Hence, the reduced geopolitical tensions between Israel and Iran, due to signs of a de-escalation, led to improved market sentiment. This diminishes the safe-haven demand for gold, contributing to its price decline.
GOLD (XAU/USD) - Technical Analysis
Today, gold prices have seen a modest uptick, rising 0.20% to a current level of $2324.955. This movement places the commodity slightly above its pivotal support at $2317.10, which has served as a baseline for today's trading activity.
The immediate resistance for gold stands at $2346.21, with subsequent barriers at $2359.26 and $2382.85. These levels must be breached to confirm a stronger bullish trend. On the downside, support is found at $2290.91, with further cushions at $2268.20 and $2244.57, which could offer buying opportunities if retested.
The Relative Strength Index (RSI) is currently at 40, indicating that gold is neither overbought nor oversold, suggesting a potential for either movement without extreme pressure from buyers or sellers. The 50-day Exponential Moving Average (EMA) is at $2364.13, highlighting a recent downward trend but with potential for reversal as prices approach this average. Additionally, gold has just completed the 23.6% Fibonacci retracement level and is eyeing the 38.2% level at around $2333, suggesting a continuation of the upward momentum if it can sustain current levels.
With the current setup, a strategic approach would involve placing a buy limit order at the pivot point of $2317, targeting a take profit at the immediate resistance of $2346, and setting a stop loss at $2296 to protect against unexpected downturns.
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GOLD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Gold Price Analysis: Rose slightly to $2324.955, currently testing above the pivot of $2317.10.
- Resistance and Support: Immediate resistance at $2346.21; supports at $2290.91 and $2268.20.
- Trading Strategy: Consider buying at $2317, with a profit target of $2346 and stop at $2296.
Today, gold prices have seen a modest uptick, rising 0.20% to a current level of $2324.955. This movement places the commodity slightly above its pivotal support at $2317.10, which has served as a baseline for today's trading activity.
The immediate resistance for gold stands at $2346.21, with subsequent barriers at $2359.26 and $2382.85. These levels must be breached to confirm a stronger bullish trend. On the downside, support is found at $2290.91, with further cushions at $2268.20 and $2244.57, which could offer buying opportunities if retested.
The Relative Strength Index (RSI) is currently at 40, indicating that gold is neither overbought nor oversold, suggesting a potential for either movement without extreme pressure from buyers or sellers. The 50-day Exponential Moving Average (EMA) is at $2364.13, highlighting a recent downward trend but with potential for reversal as prices approach this average. Additionally, gold has just completed the 23.6% Fibonacci retracement level and is eyeing the 38.2% level at around $2333, suggesting a continuation of the upward momentum if it can sustain current levels.
With the current setup, a strategic approach would involve placing a buy limit order at the pivot point of $2317, targeting a take profit at the immediate resistance of $2346, and setting a stop loss at $2296 to protect against unexpected downturns.
GOLD (XAU/USD) - Trade Ideas
Entry Price – Buy Limit 2317
Take Profit – 2346
Stop Loss – 2296
Risk to Reward – 1: 1.38
Profit & Loss Per Standard Lot = +$2900/ -$2100
Profit & Loss Per Mini Lot = +$290/ -$210
GOLD Price Analysis – April 23, 2024
Daily Price Outlook
Gold prices (XAU/USD) continued their downward rally from the previous day, staying well-offered around 2,307.55 and hitting an intraday low of 2,295.77. The reason for this downward trend can be attributed to the risk-on-market sentiment, which gained traction due to receding geopolitical tensions. It's worth noting that the easing tensions in the broader Middle East conflict have fostered a positive risk sentiment, reducing the demand for safe-haven assets like gold and contributing to its price decline.
Furthermore, better-than-anticipated US payrolls, increased consumer price inflation, and hawkish Federal Reserve statements led investors to reduce expectations for US rate cuts. This boosted the US dollar, pressuring gold prices downward due to a stronger dollar making gold more expensive for holders of other currencies.
Traders are closely monitoring upcoming events such as global PMI data, the US Q1 GDP report, and the PCE Price Index for signals on economic health. Positive data may strengthen the US dollar, potentially exerting downward pressure on gold prices.
Escalating Geopolitical Tensions in the Middle East and Their Impact on Gold Prices
On the geopolitical front, easing worries about a broader conflict in the Middle East are boosting overall market confidence, leading to a positive risk sentiment. Iran's initial indication of no retaliation following Israel's limited missile strike further contributed to this trend, marking the second consecutive day of reduced demand for gold.
However, tensions between Israel and Iran have escalated once again, with Hezbollah launching rockets at an Israeli army base in northern Israel, citing Israeli actions in southern Lebanon as the reason. The rocket attack led to retaliatory strikes from Israel, with casualties reported on both sides. Iran issued a warning in response to these events, denouncing recent Israeli actions near Isfahan. Additionally, rockets from northern Iraq targeted a US-led coalition in Syria, resulting in defensive measures.
Therefore, the re-intensified tensions in the Middle East, particularly between Israel, Iran, and Hezbollah, can lead to increased market uncertainty and risk aversion, boosting demand for safe-haven assets like gold and helping limit the gold declines.
Impact of Economic Indicators and Fed Rate Expectations on Gold Prices
On the US front, the broad-based US dollar gained momentum and remained well supported by better-than-expected job numbers, rising consumer prices, and hawkish statements from the Federal Reserve, which caused investors to rethink their projections about US interest rates.
However, reduced expectations for interest rate cuts by the Federal Reserve (Fed) are supporting the US dollar and causing gold to drop to a more than two-week low. They now anticipate the Fed might start reducing rates in September, with expectations lowered to about 34 basis points, equivalent to less than two rate cuts for 2024. This contrasts with the Fed's forecast of three cuts.
Therefore, strengthening the US dollar due to better economic indicators and reduced expectations of Fed rate cuts pushed gold prices to a two-week low, with investors now expecting fewer rate cuts in 2024.
GOLD (XAU/USD) - Technical Analysis
On April 23, gold prices saw a downturn, closing at $2301.98, which is a decline of 1.08%. This downward movement pushes the price beneath crucial technical thresholds that could impact the short-term market outlook significantly.
At $2325, the pivot point marks a notable barrier that gold failed to breach, suggesting a potential resistance area for any bullish attempts. Additional resistance levels at $2361, $2402, and $2432 may serve as further challenges for upward price movements. On the flip side, support levels at $2291, followed by $2268 and $2245, are key zones where buyers might find value, potentially halting further declines.
The Relative Strength Index (RSI) currently stands at 27, indicating that gold is in the oversold territory. This could hint at a potential rebound or underscore the prevailing selling pressure. The 50-Day Exponential Moving Average (EMA) positioned at $2368, alongside a bearish engulfing candlestick pattern, reaffirms the dominant downtrend in the market.
Given these conditions, traders might consider a sell strategy below the pivot point at $2315, targeting a take-profit point at $2280, with a stop-loss order set at $2340.
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GOLD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Price Point: Closed at $2301.98, down by 1.08%, signaling strong bearish sentiment.
- Technical Levels: Resistances at $2325, $2361; support begins at $2291.
- Market Strategy: Sell below $2315, aiming for $2280, with a stop loss at $2340.
On April 23, gold prices saw a downturn, closing at $2301.98, which is a decline of 1.08%. This downward movement pushes the price beneath crucial technical thresholds that could impact the short-term market outlook significantly.
At $2325, the pivot point marks a notable barrier that gold failed to breach, suggesting a potential resistance area for any bullish attempts. Additional resistance levels at $2361, $2402, and $2432 may serve as further challenges for upward price movements. On the flip side, support levels at $2291, followed by $2268 and $2245, are key zones where buyers might find value, potentially halting further declines.
The Relative Strength Index (RSI) currently stands at 27, indicating that gold is in the oversold territory. This could hint at a potential rebound or underscore the prevailing selling pressure. The 50-Day Exponential Moving Average (EMA) positioned at $2368, alongside a bearish engulfing candlestick pattern, reaffirms the dominant downtrend in the market.
Given these conditions, traders might consider a sell strategy below the pivot point at $2315, targeting a take-profit point at $2280, with a stop-loss order set at $2340.
GOLD (XAU/USD) - Trade Ideas
Entry Price – Sell Below 2315
Take Profit – 2280
Stop Loss – 2340
Risk to Reward – 1: 1.4
Profit & Loss Per Standard Lot = +$3500/ -$2500
Profit & Loss Per Mini Lot = +$350/ -$250
GOLD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Gold price has decreased to $2,357.28, falling below the key 50 EMA of $2,370, indicating a bearish trend.
- Key resistance set at $2,402, $2,432, and $2,462, with supports at $2,348, $2,327, and $2,304, critical for near-term price movements.
- Recommended trading strategy involves a short position below $2,370, with targets and stops carefully placed to capitalize on current market dynamics.
In today’s session, gold prices declined to $2,357.28, marking a decrease of 1.47%. The asset is currently trading below its daily pivot point of $2,378, which signals bearish momentum in the short term. This downturn reflects the trader’s response to the latest macroeconomic cues and market sentiment, with gold failing to maintain support levels indicated by the 50-Day Exponential Moving Average (EMA) at $2,370.
Gold faces immediate resistance at $2,402, with further ceilings awaiting at $2,432 and $2,462. These levels represent potential reversal zones where bullish traders might regain control. Conversely, immediate support is positioned at $2,348. If this level fails to hold, subsequent floors at $2,327 and $2,304 could come into play, likely serving as areas where buying interest could reemerge.
The Relative Strength Index (RSI) stands at 41, suggesting that gold is nearing oversold conditions but not there yet, which may limit immediate downward movements. The proximity of the current price to the 50 EMA also underscores a critical juncture; should prices sustain below $2,370, it could confirm a bearish outlook for the near term.
Given the bearish bias indicated by the break below the 50 EMA and pivotal support levels, traders might consider entering short positions below $2,370. The suggested take-profit level is set at $2,335 with a stop-loss at $2,393 to manage risk effectively.
GOLD (XAU/USD) - Trade Ideas
Entry Price – Sell Below 2370
Take Profit – 2335
Stop Loss – 2393
Risk to Reward – 1: 1.
Profit & Loss Per Standard Lot = +$3700/ -$2300
Profit & Loss Per Mini Lot = +$350/ -$230
GOLD Price Analysis – April 22, 2024
Daily Price Outlook
Gold price (XAU/USD) was unable to extend its previous week's bullish rally and turned bearish at the start of this news week, hitting an intraday low of 2,351.64 level. However, the reason for its downward trend can be attributed to improved market sentiment regarding the Iran-Israel conflict, reducing demand for safe-haven assets like gold. Additionally, expectations of lower Fed rate cuts have strengthened the US dollar, further putting pressure on gold prices.
Looking forward, traders seem hesitant to make strong positions as they closely monitor upcoming events such as the release of flash global PMI prints, the Advance US Q1 GDP report, and the US Personal Consumption Expenditures (PCE) Price Index. .
Iran-Israel Tensions Easing and Impact on Gold Prices
On the geopolitical front, the tensions between Iran and Israel have eased slightly despite recent attacks and retaliations. The US approved $13 billion in military aid for Israel, which Israel welcomed but Palestinians criticized as escalating violence. Iran downplayed reported Israeli retaliation, calling it minor, while violence persisted in Iraq, Gaza, and the West Bank. Despite ongoing conflicts and regional tensions, both Iran and Israel seem cautious about escalating into a broader war.
Hence, Iran's decision not to retaliate against Israel's limited-scale missile strike on Friday has eased fears of escalating tensions in the Middle East. This positive development has boosted investor confidence and contributed to the losses in safe-haven gold.
US Dollar Strength and Hawkish Fed Impact on Gold Prices
On the US front, the broad-based US dollar has been gaining momentum due to a hawkish Fed stance on rate cuts. This bullish US dollar is seen as another key factor keeping gold prices lower. People expect the Federal Reserve to maintain higher interest rates due to ongoing inflation, which is causing gold prices to decrease. Investors anticipate the first interest rate cut might happen in September, with fewer cuts expected in 2024. Chicago Fed President Austan Goolsbee prefers to wait and see how inflation develops before making policy changes.
On the flip side, concerns about the global economy slowing down have led people to believe that major central banks might lower interest rates together later this year. This could support gold prices by capping the gains in the US dollar.
GOLD (XAU/USD) - Technical Analysis
In today’s session, gold prices declined to $2,357.28, marking a decrease of 1.47%. The asset is currently trading below its daily pivot point of $2,378, which signals bearish momentum in the short term. This downturn reflects the trader’s response to the latest macroeconomic cues and market sentiment, with gold failing to maintain support levels indicated by the 50-Day Exponential Moving Average (EMA) at $2,370.
Gold faces immediate resistance at $2,402, with further ceilings awaiting at $2,432 and $2,462. These levels represent potential reversal zones where bullish traders might regain control. Conversely, immediate support is positioned at $2,348. If this level fails to hold, subsequent floors at $2,327 and $2,304 could come into play, likely serving as areas where buying interest could reemerge.
The Relative Strength Index (RSI) stands at 41, suggesting that gold is nearing oversold conditions but not there yet, which may limit immediate downward movements. The proximity of the current price to the 50 EMA also underscores a critical juncture; should prices sustain below $2,370, it could confirm a bearish outlook for the near term.
Given the bearish bias indicated by the break below the 50 EMA and pivotal support levels, traders might consider entering short positions below $2,370. The suggested take-profit level is set at $2,335 with a stop-loss at $2,393 to manage risk effectively.
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