XAU/USD Current price: $2,316.79

• The US Dollar shed early gains despite a souring market mood.
• Federal Reserve’s officials mixed comments doing little for speculative interest.
• XAU/USD remains technically neutral, with sellers pushing for fresh weekly lows.

Gold price flirts with $2,320 in the American session, trimming early losses that sent XAU/USD to a weekly low at $2,303.60. The US Dollar lost momentum after Wall Street’s opening despite the poor performance of American indexes. The Dow Jones Industrial Average (DJIA) posts some modest gains, although the Nasdaq Composite and the S&P 500 trade in the red.

Financial markets continue to struggle for direction in a week marked by the absence of relevant macroeconomic data. Speculative interest tries to take clues from Federal Reserve (Fed) officials’ words, but so far, none provide fresh clues that could spur some directional price action. Of course, there are always some officials confident enough to deliver a hawkish message, while others stand at the other end of the spectrum.

But in the end, none of them clearly responds to when and by how much the Fed will trim interest rates. At least market players understood it wouldn’t be anytime soon, regardless of the Fed’s dot plot signalling three potential rate cuts through 2024 at the beginning of the year.

XAU/USD short-term technical outlook

The daily chart for XAU/USD shows that the upward potential remains well-limited. The Momentum indicator turned south below its 100 level, while the Relative Strength Index (RSI) indicator consolidates around its midline, reflecting the absence of buying interest. The same chart shows sellers continue to add on approaches to the 23.6% Fibonacci retracement of the April/May rally at $2,326.50. At the same time, the 20 Simple Moving Average (SMA) remains flat at around $2,340, further limiting advances.

The near-term picture is neutral. XAU/USD remains trapped between a mildly bullish 200 SMA and a descendant 100 SMA while stuck to a flat 20 SMA. Finally, technical indicators seesaw around their midlines without clear directional strength. Bears may have better chances on a clear break below the $2,300 mark, although a bearish run will need to wait until the Gold breaks below the 38.2% retracement of the aforementioned rally at $2,260.45.

Support levels: 2,310.40 2,291.20 2,276.50

Resistance levels: 2,326.50 2,340.15 2,356.90 

XAU/USD Current price: $2,316.79

• The US Dollar shed early gains despite a souring market mood.
• Federal Reserve’s officials mixed comments doing little for speculative interest.
• XAU/USD remains technically neutral, with sellers pushing for fresh weekly lows.

Gold price flirts with $2,320 in the American session, trimming early losses that sent XAU/USD to a weekly low at $2,303.60. The US Dollar lost momentum after Wall Street’s opening despite the poor performance of American indexes. The Dow Jones Industrial Average (DJIA) posts some modest gains, although the Nasdaq Composite and the S&P 500 trade in the red.

Financial markets continue to struggle for direction in a week marked by the absence of relevant macroeconomic data. Speculative interest tries to take clues from Federal Reserve (Fed) officials’ words, but so far, none provide fresh clues that could spur some directional price action. Of course, there are always some officials confident enough to deliver a hawkish message, while others stand at the other end of the spectrum.

But in the end, none of them clearly responds to when and by how much the Fed will trim interest rates. At least market players understood it wouldn’t be anytime soon, regardless of the Fed’s dot plot signalling three potential rate cuts through 2024 at the beginning of the year.

XAU/USD short-term technical outlook

The daily chart for XAU/USD shows that the upward potential remains well-limited. The Momentum indicator turned south below its 100 level, while the Relative Strength Index (RSI) indicator consolidates around its midline, reflecting the absence of buying interest. The same chart shows sellers continue to add on approaches to the 23.6% Fibonacci retracement of the April/May rally at $2,326.50. At the same time, the 20 Simple Moving Average (SMA) remains flat at around $2,340, further limiting advances.

The near-term picture is neutral. XAU/USD remains trapped between a mildly bullish 200 SMA and a descendant 100 SMA while stuck to a flat 20 SMA. Finally, technical indicators seesaw around their midlines without clear directional strength. Bears may have better chances on a clear break below the $2,300 mark, although a bearish run will need to wait until the Gold breaks below the 38.2% retracement of the aforementioned rally at $2,260.45.

Support levels: 2,310.40 2,291.20 2,276.50

Resistance levels: 2,326.50 2,340.15 2,356.90 

XAU/USD Current price: $2,316.79

• The US Dollar shed early gains despite a souring market mood.
• Federal Reserve’s officials mixed comments doing little for speculative interest.
• XAU/USD remains technically neutral, with sellers pushing for fresh weekly lows.

Gold price flirts with $2,320 in the American session, trimming early losses that sent XAU/USD to a weekly low at $2,303.60. The US Dollar lost momentum after Wall Street’s opening despite the poor performance of American indexes. The Dow Jones Industrial Average (DJIA) posts some modest gains, although the Nasdaq Composite and the S&P 500 trade in the red.

Financial markets continue to struggle for direction in a week marked by the absence of relevant macroeconomic data. Speculative interest tries to take clues from Federal Reserve (Fed) officials’ words, but so far, none provide fresh clues that could spur some directional price action. Of course, there are always some officials confident enough to deliver a hawkish message, while others stand at the other end of the spectrum.

But in the end, none of them clearly responds to when and by how much the Fed will trim interest rates. At least market players understood it wouldn’t be anytime soon, regardless of the Fed’s dot plot signalling three potential rate cuts through 2024 at the beginning of the year.

XAU/USD short-term technical outlook

The daily chart for XAU/USD shows that the upward potential remains well-limited. The Momentum indicator turned south below its 100 level, while the Relative Strength Index (RSI) indicator consolidates around its midline, reflecting the absence of buying interest. The same chart shows sellers continue to add on approaches to the 23.6% Fibonacci retracement of the April/May rally at $2,326.50. At the same time, the 20 Simple Moving Average (SMA) remains flat at around $2,340, further limiting advances.

The near-term picture is neutral. XAU/USD remains trapped between a mildly bullish 200 SMA and a descendant 100 SMA while stuck to a flat 20 SMA. Finally, technical indicators seesaw around their midlines without clear directional strength. Bears may have better chances on a clear break below the $2,300 mark, although a bearish run will need to wait until the Gold breaks below the 38.2% retracement of the aforementioned rally at $2,260.45.

Support levels: 2,310.40 2,291.20 2,276.50

Resistance levels: 2,326.50 2,340.15 2,356.90 

U.S. Treasury Yields Inch Higher as Rate Outlook Evaluated

U.S. Treasury yields experienced a slight increase on Wednesday as investors deliberated over the latest statements from Federal Reserve officials, seeking insights into the future path of interest rates. At 10:08 GMT, the 10-year Treasury yield rose by over 1 basis point to 4.479%, while the 2-year Treasury yield edged up by just over 1 basis point to 4.839%. Investors closely scrutinized remarks from Fed officials regarding the timing and frequency of potential rate cuts, with recent comments aligning with the Fed’s current stance to maintain steady rates until clearer inflation signals emerge.

Fed Officials Signal Caution Amid Rate Cut Speculation

Minneapolis Fed President Neel Kashkari and Richmond Fed President Tom Barkin indicated a cautious approach towards rate adjustments, emphasizing the need for greater confidence in inflation returning to the 2% target before considering rate cuts. Kashkari also acknowledged the possibility of rate hikes, albeit without ruling out rate cuts entirely. Fed Chair Jerome Powell previously stated the Fed’s reluctance to raise rates at the upcoming meeting, adding to market uncertainty.

Market Speculation on Rate Cuts Amid Economic Data Awaited

Investors anticipate further insights into monetary policy as additional comments from Fed officials are anticipated throughout the week. Concurrently, market attention is directed towards key economic indicators such as weekly initial jobless claims and consumer sentiment data, which could influence future rate decisions.

Stronger Dollar Dampens Silver Appeal

The U.S. dollar strengthened, reversing some losses attributed to renewed expectations of Fed rate cuts, thereby diminishing the appeal of silver for foreign currency holders. The uncertainty surrounding the timing and likelihood of rate cuts contributes to market volatility, influencing silver’s attractiveness as an investment.

Geopolitical Tensions Provide Limited Support

While geopolitical tensions in the Middle East and Ukraine typically bolster silver’s safe-haven status, the impact was mitigated by the prevailing market focus on interest rate dynamics and the dollar’s strength. Political developments, including discussions regarding potential NATO intervention in the UK and escalating conflicts in Gaza, add to market uncertainties.

Short-Term Forecast

Silver prices remained subdued amidst rising Treasury yields and a firmer dollar, counteracting safe-haven demand stemming from geopolitical tensions. Market participants await further clarity on the Fed’s rate outlook and key economic data releases to gauge future silver price movements.

Goldman Sachs has been unabashedly bullish copper this year and they’ve been rewarded by a strong copper rally so far in 2024.

They’re now boosting their year-end forecast for LME copper to $12,000/ton, a 21% rise from current prices and they continue to see another 50% gain (on average) in 2025. Those forecasts would roughly correspond to $5.40/lb this year and $6.75 next year.

Here’s what they wrote:

The copper market’s path into scarcity has gathered momentum so far this year, with the concentrate segment – which sits just before the metal market-moving into extreme tightness. Lacking any near term mine supply solution, the only way to maintain concentrate market function will be via demand rationing. Whilst the metal market has yet to reflect that upstream tightness, we think the increasing bind on refined supply set against healthy end demand leads to an inevitable deficit path ahead. Short run midstream responses have emerged to the higher LME price signal – particularly in scrap and semis – but these are temporary responses which will abate as economics rebalance and respective inventories exhaust. Our latest supply demand estimates point a 454kt metal deficit for this year (vs 428kt deficit previously) and 467kt metal deficit for 2025 (vs. 413kt deficit previously). With the seasonal surplus phase now at an end, we expect deficit accumulation to build momentum into mid-year and particularly H2 this year. Given visible stocks stand at just over 600kt, the potential still persists for that metal tightening path in H2 this year to take the market to a stockout episode by Q4. Whilst we see a near term phase of price consolidation as most likely, given the physical market digests short term responses to the higher LME environment, this will be relatively brief. Given the larger deficits, we upgrade our year-end target on copper to $12,000/t from $10,000/t, whilst raising our full year forecast average price to $9,800/t (vs. $9,200 previously) and retain our average $15,000/t in 2025.

Oil prices decreased in early Asian trading on Wednesday due to growing U.S. crude and fuel inventories and weaker demand, which signal potential challenges in the oil market.

The decline was further influenced by cautious supply expectations before an OPEC+ policy meeting. Brent crude fell to $82.66 a barrel, while West Texas Intermediate dropped to $ 77.95 a barrel.

Inside Day Sets Up

An inside day provides a potential bull trend continuation setup. A decisive advance above today’s high would trigger the breakout. Then, further signs of strength should be seen to reflect increasing demand, including a daily close above today’s high. Once yesterday’s high is exceeded, the path is clear to test higher potential resistance areas. As noted in prior articles, the key higher price area to watch is around the 200-Day MA, now at 2.47. It is also marked by the 50% retracement at 2.46. In addition, a measured move completes at 2.40.

Measured Move Targets 2.40

The measured move is looking for a match with the mid-December rally on a percentage basis. That rally ended at a high of 3.39 to complete a 51.8% advance. A similar size move for the current rally completes at 2.40. It deserves attention especially since the target is close to the 200-Day line. When two or more indicators identify a similar price zone, it is the market’s way of identifying an area of interest. Since there is some distance to be traveled to approach the 200-Day line, it is anticipated to act as resistance on the first approach.

Watch Support on Deeper Pullback

Alternatively, if a deeper pullback happens before a bullish continuation, a drop below today’s low of 2.14 will provide the next sign of weakening. Yesterday’s low of 2.13 may act as near-term support, but if not the prior recent trend high at 2.09 is then a target. During uptrend, it is common for resistance around a prior trend high to act as support during pullbacks.

For a look at all of today’s economic events, check out our economic calendar.

XAU/USD Current price: $2,313.24

• Substantial gains among European indexes weigh on safe-haven demand.
• Treasury yields retreated further from recent multi-month highs, weighing on the USD.
• XAU/USD trades with a softer tone, but absent USD demand limits the downside.

Spot Gold retreated from the $2,330 price zone and trades in the red on Tuesday, although still confined to familiar levels. The slide can be attributed to a better market mood, as European indexes closed with substantial gains. The lack of momentum, however, resulted from United States (US) indexes consonsolidating around weekly highs yet showing little signs of life. Gains among US indexes are modest, as investors lack a clear directional catalyst.

The United States session included a speech from Federal Reserve (Fed)  Minneapolis President Neel Kashkari, who said that the most likely scenario is that interest rates will stay on hold for an extended period. He also said that raising rates is not the most likely but cannot be ruled out. Finally, Kashkari said he would need to see multiple readings on easing inflation to be confident enough to cut rates. His dovish words came as no surprise and had a limited impact on financial markets.

Meanwhile, easing US government bond yields weigh on US Dollar demand. The 10-year Treasury note offers 4.43%, down 5 basis points on the day, while the 2-year note yields 4.80%, down 1 bps and further away from its recent peak above 5%.

XAU/USD short-term technical outlook

Technically, the daily chart for XAU/USD shows it keeps meeting sellers around a Fibonacci level,  the 23.6% retracement of the April/May rally at $2,326.50. The next Fibonacci level and critical support comes at $2,260.80, a potential bearish target should Gold finally lose the $2,300 mark. In the mentioned chart, technical indicators remain within negative levels, with neutral-to-bearish slopes, reflecting the absence of buying interest. At the same time, a flat 20 Simple Moving Average offers dynamic resistance around $2,339,00, while the longer moving averages maintain their bullish slopes far below the current level.

In the near term, and according to the 4-hour chart, XAU/USD is neutral. Technical indicators head nowhere around their midlines, while the pair stands midway between a bullish 200 SMA and a bearish 100 SMA. At the same time, the pair hovers around a flat 20 SMA. Overall, the risk skews to the downside, although limited by absent US Dollar demand.

Support levels: 2,310.40 2,291.20 2,276.50

Resistance levels: 2,326.50 2,340.15 2,356.90 

XAU/USD Current price: $2,313.24

• Substantial gains among European indexes weigh on safe-haven demand.
• Treasury yields retreated further from recent multi-month highs, weighing on the USD.
• XAU/USD trades with a softer tone, but absent USD demand limits the downside.

Spot Gold retreated from the $2,330 price zone and trades in the red on Tuesday, although still confined to familiar levels. The slide can be attributed to a better market mood, as European indexes closed with substantial gains. The lack of momentum, however, resulted from United States (US) indexes consonsolidating around weekly highs yet showing little signs of life. Gains among US indexes are modest, as investors lack a clear directional catalyst.

The United States session included a speech from Federal Reserve (Fed)  Minneapolis President Neel Kashkari, who said that the most likely scenario is that interest rates will stay on hold for an extended period. He also said that raising rates is not the most likely but cannot be ruled out. Finally, Kashkari said he would need to see multiple readings on easing inflation to be confident enough to cut rates. His dovish words came as no surprise and had a limited impact on financial markets.

Meanwhile, easing US government bond yields weigh on US Dollar demand. The 10-year Treasury note offers 4.43%, down 5 basis points on the day, while the 2-year note yields 4.80%, down 1 bps and further away from its recent peak above 5%.

XAU/USD short-term technical outlook

Technically, the daily chart for XAU/USD shows it keeps meeting sellers around a Fibonacci level,  the 23.6% retracement of the April/May rally at $2,326.50. The next Fibonacci level and critical support comes at $2,260.80, a potential bearish target should Gold finally lose the $2,300 mark. In the mentioned chart, technical indicators remain within negative levels, with neutral-to-bearish slopes, reflecting the absence of buying interest. At the same time, a flat 20 Simple Moving Average offers dynamic resistance around $2,339,00, while the longer moving averages maintain their bullish slopes far below the current level.

In the near term, and according to the 4-hour chart, XAU/USD is neutral. Technical indicators head nowhere around their midlines, while the pair stands midway between a bullish 200 SMA and a bearish 100 SMA. At the same time, the pair hovers around a flat 20 SMA. Overall, the risk skews to the downside, although limited by absent US Dollar demand.

Support levels: 2,310.40 2,291.20 2,276.50

Resistance levels: 2,326.50 2,340.15 2,356.90 

This is a market that’s been consolidating with a rounded bottom for a while, and I am long in the market right now, but I am in an ETF. So, while it has moved quite nicely as of late, my gains are somewhat modest. But it’s a longer term position for me, and I’m waiting until we get to about $2.50 to take profit.

We’re at such a historically low level, going back in the longer term charts, that it does make a certain amount of sense that we get a relief rally sooner or later, if for no other reason, then it gets cold again. Because of that, I’m not levered, and I think leverage is something that’s horrible in natural gas markets to begin with.

Looking at the technical analysis, the 20 day EMA is ready to break above the 50 day EMA, and that would be a bullish sign. But we still have the 200 day EMA right around the $2.35 level. In general, a pullback probably offers buying opportunities at the first sign of a bounce, but again, you have to be very cautious with your position sizing.

For a look at all of today’s economic events, check out our economic calendar.

Impact of the Dollar and Treasury Yields

The U.S. dollar index, which compares the dollar to six major currencies, rose slightly by 0.1% to 105.23. This increase is part of a broader pattern where the dollar has gained nearly 4% this year, despite a recent dip of almost 1% following the Federal Reserve’s pause on rate hikes. Concurrently, U.S. Treasury yields saw a decrease, with the 10-year Treasury dropping 3 basis points to 4.459%. This suggests a cautious investor sentiment towards the evolving economic environment and monetary policy.

Federal Reserve’s Stance and Market Reactions

Recent statements from Federal Reserve officials, including Richmond Fed President Tom Barkin, emphasize a wait-and-see approach regarding interest rate cuts, advocating patience until more definitive signs of inflation easing appear. This stance was reinforced by weaker economic indicators, such as the April jobs report which showed an unexpected rise in unemployment from 3.8% to 3.9%, prompting speculation about the timing and extent of future rate cuts.

Investor Outlook and Gold’s Position

Despite the current consolidation in the gold market, underlying factors such as geopolitical tensions and potential banking stresses continue to provide support. The precious metal hit a record high of $2,431.29 on April 12, bolstered by strong buying from central banks and increased demand from Chinese retail investors. This suggests that while short-term profit-taking may dampen price spikes, long-term drivers remain bullish for gold.

Short-Term Forecast

Looking ahead, the market’s attention will remain fixed on upcoming comments from Fed officials, including Neel Kashkari of the Minneapolis Fed. Investors are adjusting their expectations, with current Fed funds futures indicating a 67% likelihood of rate cuts starting in September. Considering these elements, the outlook for gold remains cautiously bullish as it continues to serve as a hedge against macroeconomic uncertainty and currency fluctuations.

Technical Analysis

Oil prices increased on Tuesday following Israeli airstrikes in Rafah, Gaza, amidst ongoing but unresolved ceasefire negotiations with Hamas. This escalation has heightened market apprehensions about prolonged geopolitical tensions, potentially impacting global oil supplies.

Upcoming U.S. crude inventory data is also in focus, with expectations of a decrease in stockpiles, further influencing oil forecasts.