GOLD may enter an accumulation phase

Updated

XAUUSD remained steady as safe-haven demand due to ongoing tensions in the Middle East offset weakening expectations of a US interest rate cut this year.

Data on Monday showed U.S. retail sales rose more than expected in March. Yields on 10-year Treasury notes rose for a second straight session, with rising bond yields putting pressure on gold as they increase the opportunity cost of investing in metals. However, gold has remained strong over the past few weeks despite rising bond yields due to geopolitical tensions in the Middle East. As a safe-haven asset, gold has seen growing demand from investors and central banks amid global economic uncertainty and growing geopolitical tensions.

On the one hand, investors are still concerned about the risk of further escalation of geopolitical tensions in the Middle East, especially after Iran attacked Israel over the weekend. On the other hand, speculation that the Federal Reserve will keep interest rates higher for longer has limited demand for gold. Traders are now relying on US macro data and speeches from influential members of the Fed, including Fed Chairman Jerome Powell, to find trading opportunities.

Federal Reserve Chairman Jerome Powell said recent inflation data suggests it may take longer for the central bank to feel confident enough to cut interest rates. Powell pointed out that the Fed has lacked more progress in fighting inflation since inflation fell sharply late last year. If price pressures continue, the Fed could leave interest rates unchanged “for as long as necessary.” “Recent data clearly does not give us greater confidence but instead suggests that achieving that confidence may take longer than expected,” Powell said in his latest statement.
After Fed Chairman Powell said that recent data showed no progress in inflation, this new point caused interest rate cut expectations to continue to decline. According to the latest data from CME's "Fed Watch", the probability of the Fed keeping interest rates unchanged in May is 98%, the probability of cutting interest rates by 25 basis points is 0% and the probability of increasing interest rates by 25 basis points version is 2%. The probability that the Fed will keep interest rates unchanged until June is 84.8% and the cumulative probability of cutting interest rates by 25 basis points is 14.9%.

The market context is making trading decisions much more difficult, as two important market fundamentals are creating profoundly opposing influences. On the one hand, gold is supported by rising geopolitical risks that increase safe-haven demand for precious metals, on the other hand, gold is under pressure because the Fed's interest rate expectations are having new points due to data. Does macroeconomics favor the Fed keeping interest rates higher for longer? These two opposing factors may create a state of accumulation in the near future, with gold prices increasing and decreasing within certain limits and this will be described through the technical analysis section below.

Analysis of technical prospects for XAUUSD
On the daily chart, after gold received support from readers in yesterday's edition at $2,365, it continued to rise but was limited by the original price level of $2,400 which was also a resistance point. target for short-term increase expectations.

At this time, the $2,400 level is also the closest notable technical resistance level and once this level is broken it will open up expectations towards the previously established all-time high. Will consider selling around the Fibo 100 mark, corresponding to the resistance threshold of 2430USD. Technical conditions are still supporting the possibility of price increases with the short-term trend being noticed by the price channel and the long-term trend from EMA21. As long as gold remains above the 21 EMA, it remains in a long-term bullish trend.
In the short term, influenced by fundamental factors, gold may enter an accumulation phase with main resistance at 2,400 USD and support at 2,365 USD. It is worth noting that if the $2,365 level is broken below gold will tend to retest the 0.786% Fibonacci extension of the $2,331 price point.
Recently, gold has been traded at a very large margin, so preparations are needed from managing trading volume and open positions/protecting open positions.

The expectation of cumulative sideways with an uptrend will be noticed by the following technical levels.

Support: 2,331 - 2,365USD
Resistance: 2,400 - 2430USD

🪙SELL XAUUSD | 2431 - 2429

⚰️SL: 2435

⬆️TP1: 2424
⬆️TP2: 2419

🪙BUY XAUUSD | 2351 - 2353

⚰️SL: 2348

⬆️TP1: 2358
⬆️TP2: 2363

Note

✅ XAUUSD remains near psychological resistance and all-time high at around 2,400 USD per troy ounce. Prices are under pressure but have rebounded significantly from around $2,325/troy ounce.

Note

✴️ [Breaking News] - ECB's Schnabel : It may be prudent to continue to treat the Baseline Forecast as just an input for policy decisions or consider other changes to the framework, including in communications information, even as inflation continues to decline.

Note

This official still expects inflation to fall further but wants more data to strengthen confidence that inflation will return to the Fed's 2% target. "A strong economy and labor market are enabling the Fed to be patient with policy," she said.

Note

GOLD remains stable, two important fundamentals

Note

According to Labor Department data, initial claims stood at 212,000 last week, below economists' forecast of 215,000. Applications for continued benefits stood at 1.81 million in the week ending April 6.

Note

Gold prices rose as much as 1.3% and are headed for a fifth consecutive week of increases after unverified reports of attacks in Iran, Syria and Iraq.

Note

⭕️Gold prices rose on Friday due to risk aversion in financial markets following media reports of bombings in Iran, which raised fears of a broader regional conflict and increased the attractiveness of gold as a safe haven.

Note

🔴The House has voted to advance a foreign aid package, a significant step in sending aid to Ukraine and Israel, with 165 Democrats joining Republicans to override opposed far-right GOP members. It sets up a final vote as soon as Saturday.

Note

🔹BREAKING - A majority of members of the US House of Representatives voted in favor of a bill that could effectively ban the TikTok application in the United States

- The project is part of a package of draft laws to provide aid to allies around the world worth $95 billion

- Voting is still ongoing in the Republican-controlled chamber

Note

The USD price rose sharply after US Federal Reserve Chairman Jerome Powell mentioned that the US economy does not yet exhibit signs of inflation reaching the central bank's 2% target. He acknowledged that it might take longer than anticipated to lower interest rates. The Fed Chairman's decision on interest rates, coupled with the search for a safe investment amidst mounting geopolitical tensions following Iran's attack on Israel, further bolstered the strength of the USD.

Xayah_trading

🔰| Forex trading

🧩Get an average of 1200 pips per month
🧩Consulting on Risk Management
🧩Account management
🧩Forex signals have a high win rate

🚨🚨🚨FREE SIGNALS: t.me/+8q3AxDD9CsRjYzI1

Also on:

Related publications

Disclaimer

The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.