XAU/USD Current price: $2,302.95

• The Federal Reserve failed to deliver a clear message on future rate moves.
• Market players await the April US Nonfarm Payrolls report.
• XAU/USD is neutral-to-bearish in the near-term, strong selling interest around $2,336.50.

Financial markets struggle for direction on Thursday, with XAU/USD hovering around the $2,300 mark. The US Dollar traded throughout the day on sentiment, advancing with optimism while falling when things soured. In a broader view, however, little has changed across the board throughout the week, as the Federal Reserve (Fed) failed to deliver a clear message. The central bank announced on Wednesday that it would slow the pace of decline in its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion starting in June. Interest rates have been left unchanged, as expected.

The Fed was hawkish but not as hawkish as feared. Indeed, Chairman Jerome Powell dropped some dovish comments in the middle of his press conference. Inflation is still the main issue, but not the only one. Price pressures intensified in the first quarter of the year, while other macroeconomic data indicated economic progress slowed. Still, Powell repeated that decisions will be made meeting by meeting and clarified that it is unlikely the next policy move will be a hike. He added that cutting rates is an option if inflation resumes its fall but also if there is weakness in the labor market, uplifting the relevance of employment-related figures ahead of the next Fed decision.

Data released these days showed the labor market remains tight. The ADP survey indicated that the private sector added 192K new positions in April while the number of job openings remained little changed at 8.5 million on the last business day of March, according to the JOLTS Job Openings report. Furthermore, the US reported Unit Labor Costs in the first quarter of the year rose 4.7%, implying an upward risk to inflaiton, while Nonfarm Productivity in the same quarter advanced a measly 0.3%.

Another indicator of labor sector performance will be the April Nonfarm Payrolls report, which will be out on Friday. The US is expected to have added 243K, while the Unemployment Rate is foreseen steady at 3.8%. The report includes an update on wages, while separately, the US will release the April ISM Services PMI, an indicator of economic health.

XAU/USD short-term technical outlook

From a technical perspective, the daily chart shows sellers rejected advances for a second consecutive day around $2,326.50, the 23.6% Fibonacci retracement of the $1,996.06/$2,431.43 rally. The same chart shows the 20 Simple Moving Average (SMA) remains flat just above the mentioned level, while the longer ones maintain their upward slopes well below the current price. Finally, technical indicators held within negative levels with uneven strength, skewing the risk to the downside.

The 4-hour chart shows the pair is currently developing below bearish 20 and 100 SMAs, although a modestly bullish 200 SMA. Technical indicators recovered from their early lows but remain below their midlines and are losing their upward strength, suggesting buyers are not interested at the time being.

Support levels: 2,291.20 2,276.50 2,260.30

Resistance levels: 2,310.50 2,326.50 2,341.05

XAU/USD Current price: $2,302.95

• The Federal Reserve failed to deliver a clear message on future rate moves.
• Market players await the April US Nonfarm Payrolls report.
• XAU/USD is neutral-to-bearish in the near-term, strong selling interest around $2,336.50.

Financial markets struggle for direction on Thursday, with XAU/USD hovering around the $2,300 mark. The US Dollar traded throughout the day on sentiment, advancing with optimism while falling when things soured. In a broader view, however, little has changed across the board throughout the week, as the Federal Reserve (Fed) failed to deliver a clear message. The central bank announced on Wednesday that it would slow the pace of decline in its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion starting in June. Interest rates have been left unchanged, as expected.

The Fed was hawkish but not as hawkish as feared. Indeed, Chairman Jerome Powell dropped some dovish comments in the middle of his press conference. Inflation is still the main issue, but not the only one. Price pressures intensified in the first quarter of the year, while other macroeconomic data indicated economic progress slowed. Still, Powell repeated that decisions will be made meeting by meeting and clarified that it is unlikely the next policy move will be a hike. He added that cutting rates is an option if inflation resumes its fall but also if there is weakness in the labor market, uplifting the relevance of employment-related figures ahead of the next Fed decision.

Data released these days showed the labor market remains tight. The ADP survey indicated that the private sector added 192K new positions in April while the number of job openings remained little changed at 8.5 million on the last business day of March, according to the JOLTS Job Openings report. Furthermore, the US reported Unit Labor Costs in the first quarter of the year rose 4.7%, implying an upward risk to inflaiton, while Nonfarm Productivity in the same quarter advanced a measly 0.3%.

Another indicator of labor sector performance will be the April Nonfarm Payrolls report, which will be out on Friday. The US is expected to have added 243K, while the Unemployment Rate is foreseen steady at 3.8%. The report includes an update on wages, while separately, the US will release the April ISM Services PMI, an indicator of economic health.

XAU/USD short-term technical outlook

From a technical perspective, the daily chart shows sellers rejected advances for a second consecutive day around $2,326.50, the 23.6% Fibonacci retracement of the $1,996.06/$2,431.43 rally. The same chart shows the 20 Simple Moving Average (SMA) remains flat just above the mentioned level, while the longer ones maintain their upward slopes well below the current price. Finally, technical indicators held within negative levels with uneven strength, skewing the risk to the downside.

The 4-hour chart shows the pair is currently developing below bearish 20 and 100 SMAs, although a modestly bullish 200 SMA. Technical indicators recovered from their early lows but remain below their midlines and are losing their upward strength, suggesting buyers are not interested at the time being.

Support levels: 2,291.20 2,276.50 2,260.30

Resistance levels: 2,310.50 2,326.50 2,341.05

• Gold price holds recovery from four-week lows, as focus shifts to more US data.
• US Dollar bounces with US Treasury bond yields and the USD/JPY pair.
• Gold price capitalizes on RSI flipping to the bullish zone on the daily chart.

Gold price is consolidating Wednesday’s rebound in Asian trading on Thursday, as buyers await more employment and wage inflation data from the United States (US) for fresh trading impetus. Traders also digest the US Federal Reserve (Fed) interest rate decision and Chair Jerome Powell’s words delivered late Wednesday.

Gold price jumps as the Fed upholds rate cut bets

Gold price staged an impressive comeback from four-week lows of $2,282 on Wednesday, as the US Dollar and the US Treasury bond yields got sold off into Fed Chair Powell’s dovish signals on the interest rate outlook. The US stocks witnessed a relief rally and dented the haven demand for the Greenback after Powell ruled out the possibility of rate hikes while indicating that policymakers are still leaning toward eventual rate cuts this year.

As expected, the Fed held the Fed Funds Rate steady in the range of 5.25% to 5.5% at its May policy meeting. Powell, however, said that central bankers want “greater confidence” that inflation is falling toward 2%. “It is likely that gaining such greater confidence will take longer than previously expected. We are prepared to maintain the current target federal funds rate for as long as appropriate,” Powell added.

The probability of the first Fed rate cut, likely to be in September, rose to 53% from about 47% pre-Fed announcements. Gold price tends to benefit in a low interest-rate environment.

Meanwhile, the US Dollar was also hit by yet another suspected intervention by the Japanese authorities overnight, which saw USD/JPY crash nearly 450 pips in a span of 45 minutes. Gold price, therefore, holds on to the recent gains but the further upside appears capped should the US Dollar recover further ground, tracking the turnaround in the USD/JPY pair from near 153.00 region.

Later in the day, the weekly US Jobless Claims and the preliminary Unit Labor Cost data for the first quarter will hold relevance ahead of Friday’s Nonfarm Payrolls release.

Gold price technical analysis: Daily chart

As observed on the daily chart, Gold price found buyers near $2,280 and recaptured the $2,300 level on a daily closing basis, as the 14-day Relative Strength Index (RSI) flipped back into the bullish territory, currently sitting above 53.50.

However, Gold price faces stiff resistance at the 21-day Simple Moving Average (SMA) at $2,340. A sustained move above that level will revive the bullish interests, calling for a test of the $2,370 round level.

The next topside target is seen at the April 22 high of $2,392.

Alternatively, the immediate support is seen at the $2,300 threshold, below which the multi-month low of $2,282 will come into play.

Failure to defend the latter will trigger a fresh downtrend toward the 50-day SMA at $2,229.

 

• Gold price holds recovery from four-week lows, as focus shifts to more US data.
• US Dollar bounces with US Treasury bond yields and the USD/JPY pair.
• Gold price capitalizes on RSI flipping to the bullish zone on the daily chart.

Gold price is consolidating Wednesday’s rebound in Asian trading on Thursday, as buyers await more employment and wage inflation data from the United States (US) for fresh trading impetus. Traders also digest the US Federal Reserve (Fed) interest rate decision and Chair Jerome Powell’s words delivered late Wednesday.

Gold price jumps as the Fed upholds rate cut bets

Gold price staged an impressive comeback from four-week lows of $2,282 on Wednesday, as the US Dollar and the US Treasury bond yields got sold off into Fed Chair Powell’s dovish signals on the interest rate outlook. The US stocks witnessed a relief rally and dented the haven demand for the Greenback after Powell ruled out the possibility of rate hikes while indicating that policymakers are still leaning toward eventual rate cuts this year.

As expected, the Fed held the Fed Funds Rate steady in the range of 5.25% to 5.5% at its May policy meeting. Powell, however, said that central bankers want “greater confidence” that inflation is falling toward 2%. “It is likely that gaining such greater confidence will take longer than previously expected. We are prepared to maintain the current target federal funds rate for as long as appropriate,” Powell added.

The probability of the first Fed rate cut, likely to be in September, rose to 53% from about 47% pre-Fed announcements. Gold price tends to benefit in a low interest-rate environment.

Meanwhile, the US Dollar was also hit by yet another suspected intervention by the Japanese authorities overnight, which saw USD/JPY crash nearly 450 pips in a span of 45 minutes. Gold price, therefore, holds on to the recent gains but the further upside appears capped should the US Dollar recover further ground, tracking the turnaround in the USD/JPY pair from near 153.00 region.

Later in the day, the weekly US Jobless Claims and the preliminary Unit Labor Cost data for the first quarter will hold relevance ahead of Friday’s Nonfarm Payrolls release.

Gold price technical analysis: Daily chart

As observed on the daily chart, Gold price found buyers near $2,280 and recaptured the $2,300 level on a daily closing basis, as the 14-day Relative Strength Index (RSI) flipped back into the bullish territory, currently sitting above 53.50.

However, Gold price faces stiff resistance at the 21-day Simple Moving Average (SMA) at $2,340. A sustained move above that level will revive the bullish interests, calling for a test of the $2,370 round level.

The next topside target is seen at the April 22 high of $2,392.

Alternatively, the immediate support is seen at the $2,300 threshold, below which the multi-month low of $2,282 will come into play.

Failure to defend the latter will trigger a fresh downtrend toward the 50-day SMA at $2,229.

 

20-Day Crossed Above 50-Day for Early Bullish Indication

The 20-Day MA recently crossed back above the 50-Day after being below it since early December, other than for a brief time in late-January. However, it hasn’t yet moved away from the 50-Day MA, reflecting the current pause in bullish momentum. It will become more useful if it rises away from the 50-Day line or falls back below.

Narrow Range Day Sets Up Possible Breakout

Today is on track to end with a relatively narrow range day as volatility declines. It sets up the potential for a spike in volatility tomorrow, either up or down. At the time of this writing, the day’s high is at 1.97 and the low is at 1.91. But caution is warranted on the downside as the top boundary line of the triangle may continue to act as support and it is slightly below today’s low.

If the price of natural gas does fall through the top line and continues to drop the area around the most recent swing high of 1.85 would be an area of interest for buyers. Slightly lower is potential support around the 20-Day MA at 1.80 and the 50-Day line at 1.78. After that, the lower boundary line of the triangle is the final support zone before another bearish breakdown would trigger.

Rise Above Week’s High of 2.09 to Provide Sign of Strength

A decisive advance above today’s high will show strength but it won’t be confirmed until there is a sustainable rally above Tuesday’s high of 2.09, also this week’s high. If that happens before a deeper pullback, natural gas first targets the completion of a rising ABCD pattern with the CD leg extended by 127.2% of the AB leg. An initial target reflecting price symmetry between the two legs of the pattern was reached yesterday at 2.07.

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

XAU/USD Current price: $2,304.57

• Market players anticipate a hawkish Federal Reserve’s announcement.
• United States data showed the labor market remained tight in April.
• XAU/USD recovered the $2,300 mark, but the risk remains skewed to the downside.

Gold bottomed at $2,281.56 early on Wednesday, as demand for the US Dollar extended at the beginning of the day amid a dismal mood. Speculative interest turned risk-averse on Tuesday following the release of the higher-than-anticipated United States (US) Q1 Employment Cost Index, which fueled concerns about persistent inflationary pressure. As a result, Wall Street turned red, while government bond yields rallied, with the 2-year Treasury note hitting its highest since last November.

Conditions worsened on Wednesday, as most major markets closed due to the Labor Day Holiday. Canada and the US, however, work normally as they celebrate such a holiday on a different date. American stock markets remain under pressure, reflecting continued concerns. At the same time, demand for the Greenback eased following dismal US data and ahead of the Federal Reserve (Fed) monetary policy announcement, sending investors back into Gold. XAU/USD recovered the $2,300 threshold and trades near a daily high of $2,310.35.

US data released earlier in the day showed the labor market in the country remains tight. On the one hand, the ADP survey indicated that the private sector added 192K new positions in April. On the other hand, the number of job openings remained little changed at 8.5 million on the last business day of March, according to the JOLTS Job Openings report. Furthermore, growth-related data was tepid, to say the least. Manufacturing output “contracted in April after one month of expansion following 16 consecutive months of contraction, say the nation’s supply executives in the latest Manufacturing ISM report.” Finally, S&P Global confirmed the Manufacturing PMI for the same month at 49.4, well below the 50 expected and the previous 49.8.

The Fed is widely anticipated to leave the policy rate unchanged at 5.25%-5.5% for the sixth consecutive meeting, while market players are also pricing in a hawkish message, that is, higher for longer rates. The focus will be on Chairman Jerome Powell’s press conference and whatever clue he gives on future moves.

XAU/USD short-term technical outlook

The daily chart for XAU/USD shows it has trimmed half of Tuesday’s losses but also that the pair keeps trading below $2,326.50, the 23.6% Fibonacci retracement of the $1,996.06/$2,431.43 rally.   Also, the pair met buyers before the next Fibonacci level, the 38.2% retracement at $2,260.30. The technical picture skews the risk to the downside, as the 20 Simple Moving Average (SMA) lost its bullish strength and stands flat at around $2,335. At the same time, technical indicators remain within negative levels, although with uneven directional strength, falling short of suggesting a clear direction.

In the near term, and according to the 4-hour chart, the latest advance seems corrective. XAU/USD trades below the 20 and 100 SMAs, with the shorter gaining bearish traction. Meanwhile, technical indicators corrected oversold readings but turned directionless below their midlines, suggesting buying interest is still limited.

Support levels: 2,291.20 2,276.50 2,260.30

Resistance levels: 2,310.50 2,326.50 2,341.05

XAU/USD Current price: $2,304.57

• Market players anticipate a hawkish Federal Reserve’s announcement.
• United States data showed the labor market remained tight in April.
• XAU/USD recovered the $2,300 mark, but the risk remains skewed to the downside.

Gold bottomed at $2,281.56 early on Wednesday, as demand for the US Dollar extended at the beginning of the day amid a dismal mood. Speculative interest turned risk-averse on Tuesday following the release of the higher-than-anticipated United States (US) Q1 Employment Cost Index, which fueled concerns about persistent inflationary pressure. As a result, Wall Street turned red, while government bond yields rallied, with the 2-year Treasury note hitting its highest since last November.

Conditions worsened on Wednesday, as most major markets closed due to the Labor Day Holiday. Canada and the US, however, work normally as they celebrate such a holiday on a different date. American stock markets remain under pressure, reflecting continued concerns. At the same time, demand for the Greenback eased following dismal US data and ahead of the Federal Reserve (Fed) monetary policy announcement, sending investors back into Gold. XAU/USD recovered the $2,300 threshold and trades near a daily high of $2,310.35.

US data released earlier in the day showed the labor market in the country remains tight. On the one hand, the ADP survey indicated that the private sector added 192K new positions in April. On the other hand, the number of job openings remained little changed at 8.5 million on the last business day of March, according to the JOLTS Job Openings report. Furthermore, growth-related data was tepid, to say the least. Manufacturing output “contracted in April after one month of expansion following 16 consecutive months of contraction, say the nation’s supply executives in the latest Manufacturing ISM report.” Finally, S&P Global confirmed the Manufacturing PMI for the same month at 49.4, well below the 50 expected and the previous 49.8.

The Fed is widely anticipated to leave the policy rate unchanged at 5.25%-5.5% for the sixth consecutive meeting, while market players are also pricing in a hawkish message, that is, higher for longer rates. The focus will be on Chairman Jerome Powell’s press conference and whatever clue he gives on future moves.

XAU/USD short-term technical outlook

The daily chart for XAU/USD shows it has trimmed half of Tuesday’s losses but also that the pair keeps trading below $2,326.50, the 23.6% Fibonacci retracement of the $1,996.06/$2,431.43 rally.   Also, the pair met buyers before the next Fibonacci level, the 38.2% retracement at $2,260.30. The technical picture skews the risk to the downside, as the 20 Simple Moving Average (SMA) lost its bullish strength and stands flat at around $2,335. At the same time, technical indicators remain within negative levels, although with uneven directional strength, falling short of suggesting a clear direction.

In the near term, and according to the 4-hour chart, the latest advance seems corrective. XAU/USD trades below the 20 and 100 SMAs, with the shorter gaining bearish traction. Meanwhile, technical indicators corrected oversold readings but turned directionless below their midlines, suggesting buying interest is still limited.

Support levels: 2,291.20 2,276.50 2,260.30

Resistance levels: 2,310.50 2,326.50 2,341.05

XAU/USD Current price: $2,304.57

• Market players anticipate a hawkish Federal Reserve’s announcement.
• United States data showed the labor market remained tight in April.
• XAU/USD recovered the $2,300 mark, but the risk remains skewed to the downside.

Gold bottomed at $2,281.56 early on Wednesday, as demand for the US Dollar extended at the beginning of the day amid a dismal mood. Speculative interest turned risk-averse on Tuesday following the release of the higher-than-anticipated United States (US) Q1 Employment Cost Index, which fueled concerns about persistent inflationary pressure. As a result, Wall Street turned red, while government bond yields rallied, with the 2-year Treasury note hitting its highest since last November.

Conditions worsened on Wednesday, as most major markets closed due to the Labor Day Holiday. Canada and the US, however, work normally as they celebrate such a holiday on a different date. American stock markets remain under pressure, reflecting continued concerns. At the same time, demand for the Greenback eased following dismal US data and ahead of the Federal Reserve (Fed) monetary policy announcement, sending investors back into Gold. XAU/USD recovered the $2,300 threshold and trades near a daily high of $2,310.35.

US data released earlier in the day showed the labor market in the country remains tight. On the one hand, the ADP survey indicated that the private sector added 192K new positions in April. On the other hand, the number of job openings remained little changed at 8.5 million on the last business day of March, according to the JOLTS Job Openings report. Furthermore, growth-related data was tepid, to say the least. Manufacturing output “contracted in April after one month of expansion following 16 consecutive months of contraction, say the nation’s supply executives in the latest Manufacturing ISM report.” Finally, S&P Global confirmed the Manufacturing PMI for the same month at 49.4, well below the 50 expected and the previous 49.8.

The Fed is widely anticipated to leave the policy rate unchanged at 5.25%-5.5% for the sixth consecutive meeting, while market players are also pricing in a hawkish message, that is, higher for longer rates. The focus will be on Chairman Jerome Powell’s press conference and whatever clue he gives on future moves.

XAU/USD short-term technical outlook

The daily chart for XAU/USD shows it has trimmed half of Tuesday’s losses but also that the pair keeps trading below $2,326.50, the 23.6% Fibonacci retracement of the $1,996.06/$2,431.43 rally.   Also, the pair met buyers before the next Fibonacci level, the 38.2% retracement at $2,260.30. The technical picture skews the risk to the downside, as the 20 Simple Moving Average (SMA) lost its bullish strength and stands flat at around $2,335. At the same time, technical indicators remain within negative levels, although with uneven directional strength, falling short of suggesting a clear direction.

In the near term, and according to the 4-hour chart, the latest advance seems corrective. XAU/USD trades below the 20 and 100 SMAs, with the shorter gaining bearish traction. Meanwhile, technical indicators corrected oversold readings but turned directionless below their midlines, suggesting buying interest is still limited.

Support levels: 2,291.20 2,276.50 2,260.30

Resistance levels: 2,310.50 2,326.50 2,341.05

Platinum prices were down on Wednesday as commodities markets experienced a broad selloff. The silvery metal traded at $934.02 per ounce at the time of writing after losing 0.15 percent of its value in intraday trading. The commodity stares at the likelihood of recording a second successive day of losses and potentially reversing the upturn signals sent in late April.

There has been a general decline in safe haven demand for precious metals, including platinum, palladium, silver, and gold. This has been driven by the cooling of geopolitical tensions in the Middle East in the last two weeks. Furthermore, the US dollar has been stronger than most leading fx market currencies during that period, making it more expensive to purchase precious metals.

However, Israel’s Prime Minister Benjamin Netanyahu threw a spanner in the works on Tuesday when he reiterated that a ground offensive on the highly-populated Rafah city would go on with or without a ceasefire deal. That could add geopolitical premium to platinum prices and help it reverse recent losses. Many  analysts have stated that a ground offensive in Rafah would be a significant turning point in the nearly six-month old war. However, there has been no escalation in recent weeks despite threats from either side, making many commodity prices unresponsive to such news.

Meanwhile, the US dollar is likely to be the single-largest source of headwinds to platinum prices. The DXY has returned above 106, signaling a continuation of strengthening against six of the major global currencies. Also, the Federal Reserve is expected to retain the current 5.25%-5.0% interest rate in its announcement on Wednesday, and that is expected to buttress the dollar’s strength. Furthermore, high-yielding US treasury bonds will continue to be more attractive to investors than non-yielding platinum. As of this writing, yields on benchmark 10-year US treasury bonds are above 4.680%.

Technical analysis

Our platinum price forecast shows that the pivot is at 935.21, and the downside is likely to prevail if resistant remains at that mark. With the sellers in control, the commodity will find the first support at 930.00. Furthermore, a continuation of the bearish control could break the support and potentially test 925.21. On the other hand, a move above 935.21 will favour the buyers to be in control, with the next resistance likely to be at 938.54. Furthermore, a break past that level will invalidate the downside narrative and favour the bulls to test 945.65 in extension.

Oil prices declined for the third consecutive day, influenced by optimism over a potential ceasefire in the Middle East and rising U.S. crude inventories and production levels. The ongoing negotiations, spearheaded by Egypt between Israel and Hamas, have lessened fears of conflict escalation and supply disruptions, contributing to the downward pressure on oil prices.

Additionally, U.S. crude oil production increased significantly, recording the largest monthly rise in over three years, reaching 13.15 million barrels per day in February. This surge in supply, coupled with growing inventories, suggests a potential easing in oil prices.

• Gold price licks wounds near four-week lows ahead of US jobs data, Fed decision.
• US Dollar rebounded with US Treasury bond yields on Tuesday, as risk-off flows underpinned.
• Further downside looks likely for Gold price amid bearish RSI on the daily chart.

Gold price is catching a breather early Wednesday, having hit a four-week low at $2,285 on Tuesday. Traders refrain from placing fresh directional bets on  Gold price, anticipating the all-important US Federal Reserve (Fed) interest rate decision due later in the day.

Gold price looks vulnerable, as the Fed verdict looms

The Fed is widely expected to hold the Fed Funds Rate steady in the range of 5.25% to 5.5% at its May policy meeting. However, the path forward on the interest rates is likely to be laid out in the policy statement and Fed Chair Jerome Powell’s press conference will set the tone for Gold markets in the coming weeks.

Markets are pricing in the first Fed rate cut in September but the chances of that have been slashed to about 47% from over 60% seen a week ago, according to the CME Group’s FedWatch Tool.

The revival in the hawkish Fed expectations has been due to the recent hot US inflation data, further endorsed by a bigger-than-expected increase in the US Employment Cost Index (ECI) for the first quarter of this year. Data published by the US Labor Department’s Bureau of Labor Statistics (BLS) on Tuesday showed that the ECI, the broadest measure of labor costs, increased by 1.2% last quarter after rising by 0.9% in the fourth quarter.

Strong ECI data fuelled a big rally in the US Treasury bond yields, driving the US Dollar sharply higher across the board. The Gold price correction, therefore, gathered pace, with rates hitting the lowest level in four weeks.

Looking ahead, the Fed verdict is likely to steal the show. Before that, Gold traders will also pay close attention to the US ADP Employment Change and JOLTs Job Openings data for fresh trading impetus in the run-up to the Fed event.

So far this Wednesday’s trading, the US Dollar is gaining further ground on increased expectations that the Fed will hint at a ‘higher for longer’ interest-rate view. Wall Street Journal’s (WSJ) Fed insider, Nick Timiraos, said in his story published on Tuesday that “firmer-than-anticipated inflation in the first three months of the year has likely postponed rate cuts for the foreseeable future.”

“Officials are likely to emphasize that they are prepared to hold rates steady … for longer than they previously anticipated,” Timiraos added.

Gold price technical analysis: Daily chart

As observed on the daily chart, Gold price closed Tuesday below the key 21-day Simple Moving Average (SMA) at $2,338 and the rising trendline support, then at $2,330.

The 14-day Relative Strength Index (RSI) is now sitting beneath the 50 level, having pierced through the latter for the downside on Tuesday.

The downside break of the key daily support line and the bearish RSI indicator suggest that the path of least resistance for Gold price appears down.

The immediate support is seen at the psychological $2,250 level, below which the 50-day SMA at $2,223 will be challenged.

On the flip side, acceptance above the key confluence zone of $2,338 is critical to initiating any meaningful recovery in Gold price.

The next relevant topside barriers are seen at the $2,350 mark. followed by the $2,370 round level.

 

• Gold price licks wounds near four-week lows ahead of US jobs data, Fed decision.
• US Dollar rebounded with US Treasury bond yields on Tuesday, as risk-off flows underpinned.
• Further downside looks likely for Gold price amid bearish RSI on the daily chart.

Gold price is catching a breather early Wednesday, having hit a four-week low at $2,285 on Tuesday. Traders refrain from placing fresh directional bets on  Gold price, anticipating the all-important US Federal Reserve (Fed) interest rate decision due later in the day.

Gold price looks vulnerable, as the Fed verdict looms

The Fed is widely expected to hold the Fed Funds Rate steady in the range of 5.25% to 5.5% at its May policy meeting. However, the path forward on the interest rates is likely to be laid out in the policy statement and Fed Chair Jerome Powell’s press conference will set the tone for Gold markets in the coming weeks.

Markets are pricing in the first Fed rate cut in September but the chances of that have been slashed to about 47% from over 60% seen a week ago, according to the CME Group’s FedWatch Tool.

The revival in the hawkish Fed expectations has been due to the recent hot US inflation data, further endorsed by a bigger-than-expected increase in the US Employment Cost Index (ECI) for the first quarter of this year. Data published by the US Labor Department’s Bureau of Labor Statistics (BLS) on Tuesday showed that the ECI, the broadest measure of labor costs, increased by 1.2% last quarter after rising by 0.9% in the fourth quarter.

Strong ECI data fuelled a big rally in the US Treasury bond yields, driving the US Dollar sharply higher across the board. The Gold price correction, therefore, gathered pace, with rates hitting the lowest level in four weeks.

Looking ahead, the Fed verdict is likely to steal the show. Before that, Gold traders will also pay close attention to the US ADP Employment Change and JOLTs Job Openings data for fresh trading impetus in the run-up to the Fed event.

So far this Wednesday’s trading, the US Dollar is gaining further ground on increased expectations that the Fed will hint at a ‘higher for longer’ interest-rate view. Wall Street Journal’s (WSJ) Fed insider, Nick Timiraos, said in his story published on Tuesday that “firmer-than-anticipated inflation in the first three months of the year has likely postponed rate cuts for the foreseeable future.”

“Officials are likely to emphasize that they are prepared to hold rates steady … for longer than they previously anticipated,” Timiraos added.

Gold price technical analysis: Daily chart

As observed on the daily chart, Gold price closed Tuesday below the key 21-day Simple Moving Average (SMA) at $2,338 and the rising trendline support, then at $2,330.

The 14-day Relative Strength Index (RSI) is now sitting beneath the 50 level, having pierced through the latter for the downside on Tuesday.

The downside break of the key daily support line and the bearish RSI indicator suggest that the path of least resistance for Gold price appears down.

The immediate support is seen at the psychological $2,250 level, below which the 50-day SMA at $2,223 will be challenged.

On the flip side, acceptance above the key confluence zone of $2,338 is critical to initiating any meaningful recovery in Gold price.

The next relevant topside barriers are seen at the $2,350 mark. followed by the $2,370 round level.

 

XAU/USD Current price: $2,295.35

• Consumer Confidence in the US fell for a third consecutive month in April.
• Market players fear the Federal Reserve will maintain a hawkish stance.
• XAU/USD is technically bearish and could extend its slide towards $2,260.30.

Spot Gold is under strong selling pressure on Tuesday, breaking through the $2,300 mark in the American session. XAU/USD eased throughout the day, accelerating its slump mid-European session amid a souring market mood. The slide accelerated after the release of the United States (US) t Q1 Employment Cost Index, which rose to 1.2% from the previous 0.9%, a sign of continued inflationary pressures. Furthermore, the Conference Board (CB) Consumer Confidence Index deteriorated for the third consecutive month in April, falling to 97.0 from a downwardly revised 103.1 in March.

The news exacerbated the dismal mood ahead of the Federal Reserve (Fed) monetary policy announcement sheduled for Wednesday. The central bank is widely anticipated to keep rates unchanged amid signs of continued inflationary pressures. The central bank is also expected to repeat rates, which will remain higher for longer and, overall, deliver a hawkish message.

Meanwhile, dismal US macroeconomic data spurred risk aversion, sending stocks into a selling spiral. Wall Street is closing April with sharp losses amid concerns about local growth and despite generally upbeat earnings reports in the current seasion.

XAU/USD short-term technical outlook

XAU/USD is technically bearish and seems poised to extend its slump after breaking below $2,326.50, a critical Fibonacci level, the 23.6% retracement of the $1,996.06/$2,431.43 rally. Technical readings in the daily chart favor another leg, south, as the Momentum indicator heads firmly south below its 100 line, as the Relative Strength Index (RSI) indicator turned lower almost vertically, currently piercing its midline. At the same time, the 20 Simple Moving Average (SMA) lost its bullish strength, now a few cents above the aforementioned Fibonacci resistance.

In the near term, and according to the 4-hour chart, the bearish case is more evident. XAU/USD slid below its 20 and 100 SMAs, with the shorter one gaining downward traction. Technical indicators, in the meantime, flirt with oversold readings with firm downward slopes in line with another leg south. The pair bottomed at $2,291.26 on April 23, the immediate support level, with a stronger one at $2,260.30, the 38.2% retracement of the aforementioned daily run.

Support levels: 2,291.20 2,276.50 2,260.30

Resistance levels: 2,310.50 2,326.50 2,341.05

 

XAU/USD Current price: $2,295.35

• Consumer Confidence in the US fell for a third consecutive month in April.
• Market players fear the Federal Reserve will maintain a hawkish stance.
• XAU/USD is technically bearish and could extend its slide towards $2,260.30.

Spot Gold is under strong selling pressure on Tuesday, breaking through the $2,300 mark in the American session. XAU/USD eased throughout the day, accelerating its slump mid-European session amid a souring market mood. The slide accelerated after the release of the United States (US) t Q1 Employment Cost Index, which rose to 1.2% from the previous 0.9%, a sign of continued inflationary pressures. Furthermore, the Conference Board (CB) Consumer Confidence Index deteriorated for the third consecutive month in April, falling to 97.0 from a downwardly revised 103.1 in March.

The news exacerbated the dismal mood ahead of the Federal Reserve (Fed) monetary policy announcement sheduled for Wednesday. The central bank is widely anticipated to keep rates unchanged amid signs of continued inflationary pressures. The central bank is also expected to repeat rates, which will remain higher for longer and, overall, deliver a hawkish message.

Meanwhile, dismal US macroeconomic data spurred risk aversion, sending stocks into a selling spiral. Wall Street is closing April with sharp losses amid concerns about local growth and despite generally upbeat earnings reports in the current seasion.

XAU/USD short-term technical outlook

XAU/USD is technically bearish and seems poised to extend its slump after breaking below $2,326.50, a critical Fibonacci level, the 23.6% retracement of the $1,996.06/$2,431.43 rally. Technical readings in the daily chart favor another leg, south, as the Momentum indicator heads firmly south below its 100 line, as the Relative Strength Index (RSI) indicator turned lower almost vertically, currently piercing its midline. At the same time, the 20 Simple Moving Average (SMA) lost its bullish strength, now a few cents above the aforementioned Fibonacci resistance.

In the near term, and according to the 4-hour chart, the bearish case is more evident. XAU/USD slid below its 20 and 100 SMAs, with the shorter one gaining downward traction. Technical indicators, in the meantime, flirt with oversold readings with firm downward slopes in line with another leg south. The pair bottomed at $2,291.26 on April 23, the immediate support level, with a stronger one at $2,260.30, the 38.2% retracement of the aforementioned daily run.

Support levels: 2,291.20 2,276.50 2,260.30

Resistance levels: 2,310.50 2,326.50 2,341.05

 

Highest Daily Closing Price in 59 Days

On Monday natural gas ended the session at its highest daily closing price in 59 days. Along with today’s new recent high, it looks like it is telegraphing higher prices. If it continues to rise, and there is a good chance it will, the next higher ABCD pattern target is up at 2.20. That price is within a target zone from around 2.17 to 2.24 and it includes the 38.2% Fibonacci retracement at 2.24.

Further up is the price area around the 200-Day MA at 2.48. Notice that the moving averages are showing improving demand. Recently, the purple 8-Day MA crossed up through the orange 50-Day MA after being below it for some months. Further, the relative strength index momentum oscillator (RSI) recently broke a trendline to the upside.

Below 1.91, Likely Leads to Test of Support Lower Down

Ideally for the bulls, natural gas stays above the April 26 gap day low support price of 1.91 during retracements. If so, the above bullish case becomes more likely and may occur faster than otherwise. However, if the 1.91 price level fails to act again as support and is broken to the downside, a test of lower price levels becomes likely. Lower meaning, from 1.90 to the 1.61 closing price from the day before the gap. The April 23 high of 1.85 and the 20-Day and 50-Day MAs from 1.80 to 1.78 are two price areas that stand out.

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