Gold Forecast: Continues to See Support in the Same Area Ahead of FOMC
You can see that the gold market initially fell during the trading session, but it does seem to be catching its support a little bit as the Americans step on board.
And it’ll be interesting to see how this plays out, mainly due to the fact that it had plunged so drastically before due to the idea that the Federal Reserve may have to stay relatively tight.
However, it also looks like we have a scenario where gold is trying to do everything it can to perhaps find its footing, and if it does, that could be an excellent entry. Keep in mind that we have the FOMC meeting during the session on Wednesday. So that has a certain amount of influence as well. So do be cognizant of this.
Look for Value
With that being said, I think you look at this through the prism of a market that offers value, but you don’t want to get too big ahead of the FOMC meeting because quite frankly, you could get a nasty surprise and you never really know what the market is going to do in reaction to, for example, the press conference.
So ultimately this is a situation where I’m a buyer. But if we break down below $2,280, I might be inclined to simply wait for even better pricing. And I do think that’s possible. So, with this being the case, the market is likely to continue to see a lot of volatility, but ultimately, we’ll try to rally and go looking towards the $2,400 level.
One thing that captures my attention is the fact that the market sold off so drastically last Friday yet has just sat at support. This is generally a good sign and suggest that perhaps the market is much more resilient than a lot of people believe. If that’s going to be the case, I think it’s probably only a matter of time before we rallied. Even if we do not, then the market should offer value at an even lower level, which becomes even more interesting.
Geopolitical issues, central banks around the world cutting rates, and of course a general uneasiness should continue to make gold attractive for most buyers. Beyond that, central banks continue to be net buyers of gold, so that also means that there’s at least one huge buyer in the market at anytime.
Silver Forecast: Plunges into Support Region (Signal & Video)
Silver fell rather hard during the early hours on Tuesday. But really at this point in time, we have seen buyers jump in a couple of different times during the day, so it will be interesting to see if this holds.
A lot of what traders are paying close attention to is the FOMC meeting on Wednesday. So perhaps this is the market trying to get out of the way of anything that Jerome Powell says.
I do think that there are supportive areas underneath that people will be paying close attention to, which of course starts with the $29 level. But I think underneath there you have the 50 day EMA that is important, and then the $28.50 level that has shown itself to be important multiple times in the past. The reality is we will get a lot of our answers after the FOMC meeting, and therefore, I think the next 24 hours are probably a bit erratic at best. However, if we were to turn around and recapture the $30 level, it would be a huge coup for the buyers and it could really send this market much higher.
We Are Still in an Uptrend
We are still in an uptrend, despite the fact that it’s been brutal for the last couple of days, but we certainly are starting to ask some serious questions about silver overall. Keep in mind that silver is an industrial metal as well as a precious metal, so it does have a little bit of a different attitude in general than gold, so you can’t really extrapolate one to the other anymore.
That being said, when precious metals sell off, silver gets absolutely crushed. In fact, it is much more volatile and much more dangerous than gold. And that’s exactly why a futures contract has much more margin for silver than it does gold. So, you should extrapolate that into your CFD trading, recognizing that your position sizing needs to be very reasonable. We are approaching a point of inflection, and I think a lot of longer term trades are about to kick off. It’s our job to watch and follow.
Potential signal: IF we are above $28.50 after the FOMC press conference on Wednesday, I am a buyer of silver, with a $1 stop loss, and will be aiming for $32.50 above.
To get ACCURATE LIVE ACCURATE 2-3 TRADES (Forex/Comex/Stocks) Telegram Financial Advisor
Gold violates bullish structure; prints a head and shoulders pattern
Short-term risk is negative; confirmation signal awaited below 2,285
Gold has stabilized near May’s floor of 2,285 after losing more than 3.0% on Friday to mark its biggest daily loss in two years.
The price’s current lackluster performance indicates a probable bearish continuation, given its drop below the 20- and 50-day SMAs and beneath the significant trendline zone at 2,325. The technical indicators align with this narrative, as the RSI has dipped below its 50 neutral mark and the MACD has slipped below its zero line.
In the event that the 2,285 base crumbles, validating a bearish head and shoulders formation, selling momentum could escalate towards the 2,220 level. Falling lower, the price might retest the former constraining zone of 2,185 before plunging towards the ascending trendline, which connects the 2023 and 2024 lows at 2,145.
If the bulls resurface, they might encounter a new challenge in the caution zone between 2,325 and2,375. A decisive close above this bar could be a prerequisite for a rally back to the 2,410-2,430 zone. A victory there could lift the price as high as 2,500.
Summing up, the bears seem to be taking the lead in the gold market, with support expected to come next around the 2,220 number.
To get ACCURATE LIVE ACCURATE 2-3 TRADES (Forex/Comex/Stocks) Telegram Financial Advisor
Gold price edges higher early Wednesday, bouncing off the floor of near term range and remaining without clear direction as markets await fresh signals from key economic events this week.
Conflicting technical indicators on daily chart contribute to near term sideways mode, though slight bullish bias to persist as long as the price stays above the top of thick daily Ichimoku cloud ($2324) which contained several attacks in past two weeks, marking significant support.
On the other hand, the price is weighed down by negative 14-d momentum and Tenkan/Kijun-sen bear cross.
US services PMI will be in focus today (f/c 49.4 Apr) and if May figure remains below 50 threshold, it will be positive signal for gold.
A series of reports from the US labor sector commenced with release of JOLTS job openings report on Tuesday (Apr figure dropped well below forecast / previous release and hit the lowest in over two years).
Markets await release of US ADP private sector payroll, due later today (173K f/c vs 192K Apr) and top economic event of the week – US nonfarm payrolls (due on Friday, May 185K f/c vs Apr 175K).
Overall stronger labor data would signal further delay in Fed’s first rate cut (probably to be shifted to November) and generate negative signal for the yellow metal, while signals of weakening US labor sector would add to expectations for the first rate cut in September, which would deflate dollar.
Look for initial direction signals on form break of daily cloud top ($2324 – bearish) od daily Kijun-sen / recent range top ($2363 – bullish).
Gold prices drop below $2,000 due to a robust US dollar and unexpected inflation data, impacting market trends and forecasts. Key insights on gold’s struggle amid rising Treasury yields and the dollar’s strongest start in a decade.
The US dollar’s gains rose this week after the announcement of a stronger US inflation numbers than expected, which supports the US central bank’s policy remaining dovish for a longer period.
Accordingly, gold prices fell down with losses that reached the support level of $1,989 per ounce, which is the lowest price in two months.
Gold price XAU/USD fell below the psychological level of $2,000 for the first time in 2024, driven by a higher US dollar and higher Treasury yields fueled by hotter than expected US inflation data.
Overall, the price of the yellow metal struggled to build any momentum as the US dollar got off to its best start to a year in over a decade without any obvious triggers, gold prices could head below the $2,000 threshold for a while.
According to gold trading platforms, gold prices have fallen by 3.25% so far this year. As for the price of silver, which is the sister commodity to gold, it rose to about $22 per ounce. In general, the price of the white metal has decreased by more than 8% since the beginning of the year until now.
In general, the crash of gold prices began after the release of the US Consumer Price Index (CPI) report, which was higher than expected in January. As the FX Daily report noted: “According to the Bureau of Labor Statistics (BLS), the annual inflation rate in the United States fell to 3.1% in January, down from 3.4% in December. This was higher than economists’ expectations of 2.9%. On a monthly basis, it rose CPI rose 0.3% higher than expected. Core inflation, which excludes volatile energy and food components, held steady at 3.9% year-on-year, beating market estimates of 3.7%. Core CPI rose 0.4%, also higher than expected Economists amounted to 0.3%.
But worse, the Fed’s preferred super inflation, which consists mostly of labour intensive services with the exception of housing and energy it rose 0.8% and rose about 4% over the year. This has led investors to abandon their hopes of cutting or control U.S. interest rates in upcoming May. Traders are now pricing in the first rate cut at the June FOMC meeting.
Inflation and delayed Reducing interest rates caused turmoil in Wall Street markets , Financial market indexes crashed , while U.S. Treasury and dollar yields rose. The US dollar index (DXY), a measure of the dollar against a basket of other major currencies, reached 105 Overall, the index has risen to nearly 4% since the beginning of the year.
Today’s gold price forecast:
According to the performance on the daily chart above, there has been a significant shift in the performance of the gold price XAU/USD by moving below the psychological level of $2,000 for the ounce and the next level to the top of $1985 for the ounce and from it. Technical indicators will move towards strong saturation levels by selling and I set the level for thinking about buying gold again but without risk as global geopolitical tensions continue to support the demand for gold bullion. Bulls’ control will be restored if prices return to $2025. I still prefer to buy gold from every downward level.
To get ACCURATE LIVE ACCURATE 2-3 TRADES (Forex/Comex/Stocks) Telegram Financial Advisor