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 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
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's resistance and support levels set a narrow trading range with pivotal markers at $2363.88 and $2343.76, respectively.
- Technical indicators like RSI and 50-day EMA suggest a delicate balance in buyer and seller dynamics.
- A strategic sell below $2364, targeting $2343 with a stop at $2378, could capitalize on potential downward movements.
Today's trading session saw Gold (XAU/USD) experiencing a slight decline, with the price settling at $2354.815, marking a decrease of 0.32%. This movement occurs amidst a broader context where the precious metal struggles to sustain its bullish momentum amid fluctuating market conditions.
The critical pivot point for today stands at $2363.88, serving as the immediate resistance level. Should gold surpass this threshold, it would encounter further resistance at $2379.14 and $2393.38, respectively.
On the flip side, immediate support is observed at $2343.76, followed by stronger support levels at $2327.06 and $2306.33. These markers will be crucial if gold continues its downward trend.
The Relative Strength Index (RSI) is currently at 60, suggesting that while there is some buying momentum, the market is not yet in overbought territory. The 50-day Exponential Moving Average (EMA) is at $2319.05, which gold is trading above, indicating some resilience in its current trading range.
Given the technical setup, the recommendation for traders is to consider a selling strategy if gold falls below $2364, targeting a take profit point at $2343, with a stop loss set at $2378. This approach is based on the anticipation that breaking below the pivot could intensify selling pressure, pushing gold towards lower support levels.
GOLD (XAU/USD) - Trade Ideas
Entry Price – Sell Below 2364
Take Profit – 2343
Stop Loss – 2378
Risk to Reward – 1: 1.5
Profit & Loss Per Standard Lot = +$2100/ -$1400
Profit & Loss Per Mini Lot = +$210/ -$140
GOLD Price Analysis – May 13, 2024
Daily Price Outlook
Gold price (XAU/USD) is unable to gain positive traction and remains under pressure around the 2,343.70 level, hitting an intraday low of 2,339.15. However, the declining rally in the gold price started after hawkish remarks from the Federal Reserve (Fed) and growing speculation that the Fed might delay its easing plans, boosting the US dollar. The US dollar has been gaining momentum mainly due to the hawkish remarks from the Federal Reserve.
Moving on, traders seem cautious to place any strong bids ahead of the Fed’s Jefferson and Mester speeches on Monday. Meanwhile, the US Consumer Price Index (CPI), Producer Price Index (PPI), and Retail Sales will be in the spotlight. In case of stronger-than-expected economic data, this might dampen hopes for a Fed rate cut and exert some selling pressure on XAU/USD.
Impact of Federal Reserve Policy on Gold
On the US front, the Federal Reserve's hawkish stance and talk of delaying plans to aid the economy have given a boost to the US dollar and pushed down gold prices. San Francisco Fed President Daly said, "We might need to keep policies tight for a while to reach our inflation goals." Meanwhile, Atlanta Fed President Bostic hinted at possible interest rate cuts this year despite uncertainties. Dallas Fed President Logan warned about the risks of inflation, saying it's too early to lower rates. Minneapolis Fed President Kashkari is taking a "wait-and-see" approach, saying we'd really need a good reason to raise rates to tackle inflation.
On the data front, the University of Michigan Consumer Sentiment Index fell to 67.4 in May from April's 77.2, hitting a six-month low and missing market forecasts of 76. At the same time, the UoM 5-year Consumer Inflation Expectation climbed to 3.1%, a six-month peak, up from the previous 3.0%.
Therefore, the Federal Reserve's hawkish stance and mixed signals from Fed officials have strengthened the US dollar and dampened silver prices. Meanwhile, the weak consumer sentiment and rising inflation expectations could further pressure gold prices.
Geopolitical Tensions in Middle East Boost Gold Prices
On the geopolitical front, ongoing tensions in the Middle East are likely to help precious metals in the near term. The Israeli recent military's operations in northern Gaza and reports of an impending full-scale invasion, along with fierce clashes and mass evacuations, have heightened regional instability. Further, Egypt's decision to join a lawsuit against Israel at the International Court of Justice further escalates tensions.
Therefore, the escalating tensions in the Middle East, with Israeli military operations and geopolitical uncertainties, could bolster demand for safe-haven assets like gold, lifting its price in the short term.
GOLD (XAU/USD) - Technical Analysis
Today's trading session saw Gold (XAU/USD) experiencing a slight decline, with the price settling at $2354.815, marking a decrease of 0.32%. This movement occurs amidst a broader context where the precious metal struggles to sustain its bullish momentum amid fluctuating market conditions.
The critical pivot point for today stands at $2363.88, serving as the immediate resistance level. Should gold surpass this threshold, it would encounter further resistance at $2379.14 and $2393.38, respectively.
On the flip side, immediate support is observed at $2343.76, followed by stronger support levels at $2327.06 and $2306.33. These markers will be crucial if gold continues its downward trend.
The Relative Strength Index (RSI) is currently at 60, suggesting that while there is some buying momentum, the market is not yet in overbought territory. The 50-day Exponential Moving Average (EMA) is at $2319.05, which gold is trading above, indicating some resilience in its current trading range.
Given the technical setup, the recommendation for traders is to consider a selling strategy if gold falls below $2364, targeting a take profit point at $2343, with a stop loss set at $2378. This approach is based on the anticipation that breaking below the pivot could intensify selling pressure, pushing gold towards lower support levels.
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GOLD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Gold's upward trajectory persists, targeting the first resistance at $2372.66 as the market remains buoyant.
- RSI suggests overbought conditions at 71, cautioning of potential price consolidation or pullback.
- A strategic entry is recommended above $2353, with defined take-profit and stop-loss levels to capitalize on prevailing trends.
In today's trading session, Gold (XAU/USD) has observed a modest increase, currently priced at $2357.13, marking a 0.23% rise. The precious metal continues to exhibit strength as it trades well above the pivotal $2345.71 level, driven by persistent investor interest amid a fluctuating market landscape.
The immediate pivot point for Gold stands at $2345.71. Resistance levels are distinctly marked, with the first at $2372.66, followed by higher resistances at $2393.38 and $2416.87, which could serve as future targets should bullish momentum persist.
On the downside, the initial support is found at $2327.06, with subsequent supports at $2306.33 and $2283.88, crucial for buffering any potential retracements.
The Relative Strength Index (RSI) is currently high at 71, suggesting that Gold might be approaching overbought conditions, potentially signaling a forthcoming consolidation or pullback.
Meanwhile, the 50-Day Exponential Moving Average (EMA) stands at $2313.08, reinforcing the ongoing bullish sentiment as prices remain above this key moving average.
Given the current technical setup, a strategic approach would be to buy Gold if it ascends above $2353, aiming for a take-profit at $2372, while setting a stop loss at $2340 to mitigate potential downside risks.
GOLD (XAU/USD) - Trade Ideas
Entry Price – Buy Above 2353
Take Profit – 2372
Stop Loss – 2340
Risk to Reward – 1: 1.4
Profit & Loss Per Standard Lot = +$1900/ -$1300
Profit & Loss Per Mini Lot = +$190/ -$130
GOLD Price Analysis – May 10, 2024
Daily Price Outlook
Gold price (XAU/USD) prolonged its bullish bias and continued to gain traction on the back of worsening geopolitical tensions, which boosted the safe-haven assets including gold price. It is currently trading around $2,375.77, hitting the intra-day high of $2,376.49. Moreover, the upticks in the gold price were further bolstered by the weak US labor market data, which has sparked speculation that the Federal Reserve (Fed) may lower interest rates sooner than previously expected.
Weakening Job Market and Speculation of Fed Rate Cuts Drive Interest in Gold
On the US front, recent signs of a weakening job market have revived expectations that the Federal Reserve might need to cut interest rates sooner than expected. Initial Jobless Claims data for early May showed a higher-than-expected rise, following a disappointing Nonfarm Payrolls report for April. This indicates that the US economy is struggling due to high interest rates, prompting speculation of an earlier rate cut by the Fed.
However, some Federal Reserve officials, such as Boston Fed President Susan Collins and Minneapolis Fed President Neel Kashkari, have expressed hawkish views, suggesting that inflation pressures are still too strong to consider lowering rates.
On the data front, the US Bureau of Labor Statistics (BLS) reported that more people filed for unemployment benefits than expected. The latest Initial Jobless Claims for the week ending May 3 climbed to 231,000, exceeding forecasts of 210,000 and higher than the previous week's 209,000. This uptick could indicate a weakening job market, which might influence the Federal Reserve's decisions on interest rates.
As a result, traders are now waiting to see next week's Consumer Price Index (CPI) and Producer Price Index (PPI) reports, which could provide more clues about the Fed's monetary policy direction.
Therefore, the rising unemployment claims and the potential for lower interest rates due to a weaker labor market pushed gold prices higher.
Geopolitical Tensions in the Middle East Boost Gold's Safe-Haven Demand
On the geopolitical front, the previous peace talks between Hamas and Israel in Cairo have collapsed, causing tensions to escalate. Israeli forces are gathering near Rafah, the last major city in Gaza not destroyed. President Biden warned against a full-scale attack, prompting the US to halt weapon shipments to Israel. Despite the warning, reports indicate strikes on a mosque and houses in Rafah, resulting in casualties, including women and children.
Therefore, the escalation of tensions in the Middle East, with the collapse of peace talks between Hamas and Israel and the threat of further conflict in Gaza, has increased demand for gold as a safe-haven asset.
GOLD (XAU/USD) - Technical Analysis
In today's trading session, Gold (XAU/USD) has observed a modest increase, currently priced at $2357.13, marking a 0.23% rise. The precious metal continues to exhibit strength as it trades well above the pivotal $2345.71 level, driven by persistent investor interest amid a fluctuating market landscape.
The immediate pivot point for Gold stands at $2345.71. Resistance levels are distinctly marked, with the first at $2372.66, followed by higher resistances at $2393.38 and $2416.87, which could serve as future targets should bullish momentum persist.
On the downside, the initial support is found at $2327.06, with subsequent supports at $2306.33 and $2283.88, crucial for buffering any potential retracements.
The Relative Strength Index (RSI) is currently high at 71, suggesting that Gold might be approaching overbought conditions, potentially signaling a forthcoming consolidation or pullback.
Meanwhile, the 50-Day Exponential Moving Average (EMA) stands at $2313.08, reinforcing the ongoing bullish sentiment as prices remain above this key moving average.
Given the current technical setup, a strategic approach would be to buy Gold if it ascends above $2353, aiming for a take-profit at $2372, while setting a stop loss at $2340 to mitigate potential downside risks.
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GOLD Price Analysis – May 09, 2024
Daily Price Outlook
Despite the hawkish comments from the US Federal Reserve and stronger US dollar, the Gold price (XAU/USD) prolonged its upward trend and remained well bid around the 2,309.73 level and hitting an intraday high of 2,319.80. However, the upward trend in gold could be associated with a risk-averse environment and uncertainties surrounding geopolitical tensions in the Middle East, which are not showing any signs of slowing down. This boost safe-haven assets like gold. On the other hand, the stronger US dollar, backed by hawkish comments from the US Federal Reserve (Fed), could cap gains in the gold price.
Impact of Federal Reserve Outlook and Consumer Sentiment on Gold Prices
On the US front, the US dollar has been gaining positive traction due to expectations that the Federal Reserve will maintain high interest rates for a while. This expectation is fueled by statements from influential Fed officials like Susan Collins from Boston, who said it could take longer to reduce inflation to the target of 2%. Similarly, New York's John Williams and Minneapolis's Neel Kashkari have noted that interest rates might remain elevated for an extended time.
Consequently, investors now estimate only a 55% chance of a quarter-point rate cut by the Fed in September, a significant decrease from the 85% likelihood reported before last week's employment data.
Meanwhile, the University of Michigan's Consumer Sentiment Index is forecasted to drop from 77.2 in April to 76.0 in May. This index measures consumer confidence in the economy. A decline indicates that people might be slightly less optimistic about things like job prospects and their financial situation. This could have some influence on the Federal Reserve's decisions regarding interest rates.
Therefore, the stronger US dollar and reduced consumer sentiment might put downward pressure on gold prices, as a robust dollar makes gold less appealing to investors, while lower consumer confidence could indicate decreased demand for safe-haven assets like gold.
Geopolitical Tensions in the Middle East and Their Impact on Gold Prices
On the geopolitical front, the ongoing tensions in the Middle East continue despite Hamas showing willingness to agree to a draft ceasefire agreement, which Israel rejected because it didn't meet the demands of Israeli Prime Minister Benjamin Netanyahu. Whereas, Israel's closure of the Rafah border crossing limits humanitarian aid to Gaza. Meanwhile, President Biden's refusal to provide offensive weapons to Israel for Rafah attacks indicates a significant shift in his stance on Israeli military actions.
It should be noted that President Biden drew attention to civilian casualties from Israeli bombings in Gaza as the ongoing conflict has displaced tens of thousands of Palestinians, resulting in thousands of deaths and injuries in Gaza. Hence, the uncertainty from the conflict could boost gold's safe-haven appeal, driving up prices.
GOLD (XAU/USD) - Technical Analysis
As of today, Gold's price is marked at $2,314.645, reflecting a rise of 0.29%. The commodity's movements suggest a stable upward trend, hovering slightly above the 50-Day Exponential Moving Average (EMA) of $2,313. This positioning of the price relative to the EMA indicates mild bullish signals within the market. The Relative Strength Index (RSI) stands at a neutral 50, suggesting that Gold is neither overbought nor oversold at the current level, providing room for potential price swings in either direction.
The technical chart shows a current pivot point at $2,332, which serves as immediate resistance. Should Gold breach this level, it would face further resistance at $2,349 and $2,366. These levels could act as key barriers before any significant upward continuation is confirmed. Conversely, if the price retreats, immediate support is found at $2,292. Subsequent support levels at $2,277 and $2,260 will be critical in preventing further declines and stabilizing the price.
Given the current setup and market indicators, a conservative trading strategy would be to enter a long position if Gold rises above $2,310. For those taking this position, a reasonable target for taking profits could be set at $2,325, with a stop loss at $2,300 to protect against unexpected downturns.
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GOLD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Gold price shows modest increase to $2,314.645, up by 0.29%, with potential bullish undertones above the 50 EMA.
- Key resistances set at $2,332, $2,349, and $2,366; supports firm at $2,292, $2,277, and $2,260.
- Proposed trading strategy: Buy above $2,310, target $2,325, stop loss at $2,300 for risk control.
As of today, Gold's price is marked at $2,314.645, reflecting a rise of 0.29%. The commodity's movements suggest a stable upward trend, hovering slightly above the 50-Day Exponential Moving Average (EMA) of $2,313. This positioning of the price relative to the EMA indicates mild bullish signals within the market. The Relative Strength Index (RSI) stands at a neutral 50, suggesting that Gold is neither overbought nor oversold at the current level, providing room for potential price swings in either direction.
The technical chart shows a current pivot point at $2,332, which serves as immediate resistance. Should Gold breach this level, it would face further resistance at $2,349 and $2,366. These levels could act as key barriers before any significant upward continuation is confirmed. Conversely, if the price retreats, immediate support is found at $2,292. Subsequent support levels at $2,277 and $2,260 will be critical in preventing further declines and stabilizing the price.
Given the current setup and market indicators, a conservative trading strategy would be to enter a long position if Gold rises above $2,310. For those taking this position, a reasonable target for taking profits could be set at $2,325, with a stop loss at $2,300 to protect against unexpected downturns.
GOLD (XAU/USD) - Trade Ideas
Entry Price – Buy Above 2310
Take Profit – 2325
Stop Loss – 2300
Risk to Reward – 1: 1.5
Profit & Loss Per Standard Lot = +$1500/ -$1000
Profit & Loss Per Mini Lot = +$150/ -$100
GOLD Price Analysis – May 08, 2024
Daily Price Outlook
Gold price (XAU/USD) prolonged its bullish bias and remained well bid around the $2,315 level, reaching an intraday high of $2,321.43. However, the reason for its upward trend could be linked to risk-off mood in the market due to the increasing geopolitical tensions and uncertainty in the market. This boosted safe-haven assets including the Gold price. However, the increasing geopolitical tensions in Gaza, driven by Israeli military strikes despite ceasefire talks, can boost safe-haven assets like gold as investors seek stability amidst uncertainty, raising gold prices.
Hawkish Fed Remarks Could Weaken Gold Prices Amid Rate Cut Uncertainty
Despite disappointing employment data, the likelihood of interest rate cuts in 2024 is diminishing due to hawkish statements from Federal Reserve officials. This could lead to a decline in gold prices as rate cuts typically support precious metal values. However, upcoming speeches from Fed policymakers Philip Jefferson, Susan Collins, and Lisa Cook might reinforce a stronger US dollar, exerting downward pressure on gold.
Neel Kashkari, the president of the Minneapolis Federal Reserve, has indicated that the central bank might consider cutting interest rates if inflation begins to ease. This reflects a more flexible approach to monetary policy, where rate cuts are used to support economic growth when inflation is under control.
Thomas Barkin, the president of the Richmond Federal Reserve, holds a different view, suggesting that the current interest rates are adequate to manage inflation. This implies that the Fed might not need to make further adjustments to interest rates to keep inflation in check.
Financial markets are anticipating about 50 basis points (0.5%) of interest rate cuts from the Fed in 2024, with a strong likelihood of a 25 basis point (0.25%) rate cut in September, according to the CME's FedWatch Tool, which tracks market expectations for Fed policy. This suggests that traders and investors are already pricing in lower rates for 2024.
Meanwhile, the University of Michigan's Consumer Sentiment Index is an important gauge of consumer confidence in the US economy. It's expected to drop from 77.2 in April to 76.0 in May, and this forecasted decline will be closely watched by gold traders. A drop in consumer sentiment could signal economic concerns, potentially affecting gold prices and other safe-haven assets.
Hence, the hawkish remarks from Federal Reserve officials dampen hopes for interest rate cuts in 2024, strengthening the US dollar and leading to a decline in gold prices.
Geopolitical Tensions in Gaza Drive Safe-Haven Demand
On the geopolitical front, renewed conflict in Gaza has boosted the safe-haven demand due to heightened uncertainty. Israeli troops launched strikes on Gaza's southernmost city, despite a ceasefire proposal agreed upon by Hamas on Monday. Israel indicated that the ceasefire conditions didn't meet its requirements, leading to continued tensions. Hence, the ongoing conflict in Gaza has triggered safe-haven demand, leading to increased uncertainty. This has likely boosted the price of gold, as investors seek stability amidst rising geopolitical tensions.
GOLD (XAU/USD) - Technical Analysis
In today's trading session, Gold (XAU/USD) posted a slight increase, nudging up by 0.04% to $2317.31, signaling a stabilization within a tight trading range. The technical structure suggests that the pivot point at $2330 remains a crucial juncture for determining Gold’s short-term trajectory.
Resistance levels have been clearly delineated at $2349, $2370, and $2393. These thresholds represent potential selling pressure points that could cap upward movements should gold attempt to extend gains.
Conversely, the support structure begins notably lower at $2296, followed by $2277 and $2260. These levels could act as cushions if the price retreats, offering potential buying opportunities for traders looking to capitalize on dips.
Technical indicators, including the Relative Strength Index (RSI) at 52, hint at a neutral market sentiment, neither overbought nor oversold, suggesting potential for both upward and downward movements.
The 50-day Exponential Moving Average (EMA) at $2315 provides near support, reinforcing the $2330 pivot level as a critical threshold. If prices sustain below this pivot, it could trigger a bearish trend towards the lower support levels.
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