Fundamental View

The fundamental outlook for gold suggests a mix of factors influencing its trajectory. Analysts predict a bullish trend, with forecasts ranging from $1,800 to $2,060 per ounce in 2023, and a continued upward trend in 2024. However, challenges like waning demand, driven by rising real rates and a stronger US dollar, persist, undermining gold’s strength. Gold is influenced by fluctuations in the US dollar and yields. The rise of gold by 14% from November 2022 to early February 2023 was supported by a less hawkish tone from the US Federal Reserve.

The significant activity of buying gold by central banks with the net purchase of 800 tons of gold last year has been the main factor behind the positive performance of gold. In the absence of a clear catalyst, the increase in the price of gold on the day may be due to the execution of profit limits of long positions. In this case, we can have the possibility of a short-term retreat in the price of gold.

Latest Gold’s Rally

Gold crossed its August 2020 high due to expectations of a US interest rate cut and the cautious stance of the Federal Reserve. The Fed’s comments fueled the gold rally. Gold prices were further boosted by Federal Reserve Chairman Powell’s comments on the restrictive monetary policy stance. The comment led to a decrease in yields and the US dollar, favoring the rise of gold.

There is always FED in between

Amid speculation of impending interest rate cuts, Powell cautioned against premature expectations. This led to a cautious market, with gold prices reflecting a hesitancy to react to signs of the Federal Reserve delaying rate cuts.

📅 Economic Calendar

Technical View

The medium-term outlook for gold looks upbeat, however, the potential for real rates to rise in the face of deflation may weigh on gold investments, while net long positions have increased. ETF holdings have not risen significantly, reflecting mixed sentiment. It is in the gold market.

Any talk and possibility of an interest rate hike by the Federal Reserve can bring the price of gold back to the 1850 area, and if the expectations of an increase in interest rates by the Federal Reserve continue to increase as in the past weeks, the price of gold will be above 50-20.

Our direction for gold remains bullish and dips can be bought. Significant levels for a buy scenario are the 2035 levels.

Long depended on Fed expectation by Alisabbaghi on TradingView.com

Calendar events

Affecting news/events for gold

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Fundamental View

Gold has been unappealing to buyers for three weeks. Strong economic data and high inflation led to a drop in gold prices. For the third consecutive week, the price per ounce of gold fell, leading to renewed discussions of a June rate hike. This shift in interest rate projections is the primary explanation for the decrease in gold’s value.

The inflation growth rate has not decreased yet!

Macroeconomic data was the main driver of the market. The durable goods index, consumer spending, and US PCE inflation all exceeded projections. US Federal Reserve emphasized the PCE index, which peaked at 4.7% in April. The near 5% US inflation merits ongoing interest rate adjustments. 0.25% hike anticipated by investors.

The US dollar strengthened

While the ounce of gold is down, the US dollar is up. According to analysts, the gold ounce will likely be under pressure until the beginning of the third quarter of 2023 due to strengthening interest rate expectations. Meanwhile, the only debt crisis of the US federal government can support the gold ounce. Negotiations on raising the federal government’s debt ceiling are ongoing and have yet to come to a conclusion.

📅 Economic Calendar

Technical View

It is still too early to talk about the formation of a price floor in the market. It is true that an ounce of gold has dropped from its historical peak of $125, but there is still no news of a price floor. It seems that the fair price of an ounce of gold is in the range of 1923 to 1945 dollars assuming US interest rate hikes in June and July.

According to the weekly chart of XAUUSD, the price has reached the upward trend line following the downward reversal from the rate of $2055. In this week’s trading, the ounce of gold will face the trend line again. It seems that the bearish momentum in the market has increased.

If selling pressures increase and the upward trend line is broken, the market structure will change to a downward trend its possible that the price drop to the first support area of $1,923, and the key support of $1,871

But if the trend line turns into support and the price crosses above the partial resistance of $1950, the market can start a new upward movement first up to the trend rate of $2000.

Weekly gold analysis by Alisabbaghi on TradingView.com

Calendar events

Affecting news/events for gold

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Fundamental View

Is gold still supported?

Although the ounce of gold had a rough week, falling almost $50 and experiencing its worst performance since February, we saw a bullish return to the market on Friday.

One of the biggest drivers for the ounce of gold was the strengthening of the US dollar. The price of an ounce of gold has an inverse relationship with the value of the US dollar. The US dollar strengthened in response to the country’s economic data and changed interest rate expectations. But last Friday, the head of the US Federal Reserve said interest rates may not rise much. He is concerned about the credit crunch in the American banking industry. Powell said that “financial stability tools have helped calm the situation. However, the developments in the American banking sector are such that they make financial and credit conditions difficult and will most likely harm economic growth, employment, and inflation. For this reason, perhaps there is no need for a quick and large increase in interest rates. And it happened that on Friday gold was supported in the range of 1950 and now it is trading in the range of 1980.

📅 Economic Calendar

In the coming week, the FOMC Minutes will be published. In the meantime, the GDP data will be updated and the desired inflation index of the Federal Reserve (PCE) will be at the center of attention.

US federal government debt crisis

This is a sign that the Federal Reserve may keep interest rates on record from June. After the words
The head of the US Federal Reserve, market interest rate expectations were weakened. From the point of view of the market, the possibility of an increase of 0.25 percentage points in the interest rate in June has reached 10%. Before this, the market was preparing to stop interest rate hikes from June. Several officials of the US Federal Reserve have backed away from the idea of stopping interest rate hikes. Even hopes for a rate cut at the end of 2023 have weakened.
Before the words of the head of the US Federal Reserve, the market was preparing for a 0.25 percentage point increase in the interest rate in June and had abandoned the expectation of a rate cut until the end of 2023. For this reason, we saw a sharp fall in the price of an ounce of gold. But it seems that the Federal Reserve Chairman’s comments have caused a change in interest rate expectations.

Technical View

According to analysts, it is expected that the price of an ounce of gold will experience an upward return from the current levels. However, there is a risk of an ounce of gold falling into the $1,900 range. The first resistance of the market is the 1980 range and then the 2000 dollar range. The support area of the market is in the range of 1960-1950 dollars. If negotiations to increase the federal government’s debt ceiling fail, the price of an ounce of gold could stabilize above $2,000.

Is gold still supported? by Alisabbaghi on TradingView.com

Calendar events

Affecting news/events for gold

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Fundamental View

Buyers of gold in recession, or sellers of it for a stronger dollar?

Volatility in the bond market and uncertainty about interest rate cuts are pushing the dollar higher, dimming the appeal of gold (XAU).

Last week, the recovery of the US dollar affected the price of gold (XAU) and put pressure on gold. Because market participants assessed the possibility of the Federal Reserve raising interest rates in May. However, there are still many buyers and markets for gold, who see the fear of stagnation more strongly.

Now for this week. There are many things in the US economic calendar that will help traders know what to expect from the Fed. Investors are monitoring Economic growth data (GDP), jobless claims on Thursday, and PCE data on Friday. The GDP print is expected to grow at an annual rate of 2.0% during this period, which means that a recession is not imminent. And If the PCE index prints much higher than expected, it reduces the likelihood that the Fed will hold off on rate hikes in May, especially if economic data is generally positive.

With this data, Investors evaluate the interest rate increase in May. Although the market expects a 25 basis point hike on May 3, uncertainty surrounding the possibility of a rate cut this year has caused volatility in the US bond market. The volatility of the bond market causes the dollar to move.

📅 Economic Calendar

The market is currently looking at a 25 percent hike, with the direction of travel determined by whether the Fed will hold off on interest rate changes after that. While this could support gold prices, the recent market rally and overly technical conditions mean there is still scope for a downside if the Fed’s rate outlook is confirmed. According to the CME FedWatch tool, there is an 84.6% chance of a 25% rate hike in May, with interest rate cuts expected later in the year. Higher interest rates reduce the attractiveness of non-yielding bullion.

Technical View

Gold has taken a downward trend in the four-hour time frame. This precious metal has locked itself in the $1960 to $2020 area. It shows that gold needs some drivers to rise or fall. Any sign of information that leads traders to fear further recession could push gold to the $2020-$2048 highs. But what we think is the better-than-expected print for the US economy makes more downward pressure on XAU.
Gold is currently trading at the price of $1982 dollars and is on a dynamic resistance. There is a possibility of a slight rise for gold at the beginning of the week, but we don’t have any rush to trade. If the economic data encourages us to sell gold, we will wait and do it in the $2000 to $2020 area, and if we going to buy gold, we will do it in $1960 or in the important key area of 1920 dollars.

Calendar events

Affecting news/events for gold

Thu Apr 27: 

🇺🇸 USD Advance GDP q/q and Unemployment Claims

Fri Apr 28:

🇺🇸 USD Core PCE Price Index and USD Employment Cost Index

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Fundamental View

Gold is still under buying pressure but it is at an important level

In the past week, gold was fixed above 2000 dollars. This consolidation was done right above the $2000 and $2002 area. Important and psychological area.
The momentum is still bullish and can rise again to its historical high. We mean the area of 2060. But this price jump definitely needs a catalyst as a driver.

The instability of the economy, the uncertainty in the decisions of the Federal Reserve to interest rate increasing cycles, the purchase of gold by central banks, the crisis of banks under the pressure of recession and inflation, as well as the decrease in bond yields make gold more attractive for buying than ever before.

If in the coming week, the employment data is higher than expected or if the inflation increases a lot, they can make gold fall sharply and return it to the previous level.

But any disappointing data or even close to expectations will stabilize gold in the current areas and even towards higher levels.

📅 Economic Calendar

Technical View

Technically, gold is slightly overbought at current levels. But what is seen in the candlesticks (downward shadows) shows the pressure on buyers in this area.

If there is no better than expected data for the US economy (employers and CPI), any drop in the price of gold to a lower level can be considered as a correction and another opportunity for buying gold again.

any price drop considered as a correction and a BUY opportunity by Alisabbaghi on TradingView.com

Calendar events

Important events for gold:

USD CPI and Core CPI, FOMC meeting on Wed

Fundamental View

Gold Growth stopped at a strong level of $2000

Last week, we mentioned the buy sentiments of gold as a safe-haven asset.
Now that the market has priced banking crises what are the gold movement drivers?

Recession, yes fear of stagnation is remain. Fear of recession in the global economy remains and now the gold buyers are still in their long positions.

Why do the world’s banks buy gold?

On the other hand, the multi-polarization of economic powers and the formation of new regions in the east by China and Russia, and the declining influence of the US dollar as the global reserve currency has been the main driver of gold’s rally to the $2,000 level last week.
Undoubtedly, China and Russia intend to free themselves from the vortex of the global economy, which is heavily dependent on the US dollar. The concern about the extreme fluctuations of the dollar and the euro has caused the demand for gold to increase from the central banks of the world. Concerns about the trade war and the possibility of a currency war between China and the United States are also considered important factors.

Last week, we read in the news that China made its first liquefied natural gas transaction in yuan through the Shanghai Oil and Gas Exchange. Also, last week, China and Brazil announced that they will carry out trade and financial exchanges between them in Riel (Brazil’s currency) and Yuan, to which Saudi Arabia, the United Arab Emirates, and the Middle East have also been added. The result is less use of US dollars and more use of gold.

Technical View

The closing price in the previous month’s candle shows the strong power of major buyers of gold, and this defends the upward trend of gold in the long term.

From a technical point of view, we are currently in the overbought zone for Gold/XAU. This does not mean that gold will go down. Rather, we consider it only a price correction and collecting more liquidity at lower prices for new buyers.

$1955, $1937, and $1910 are our main support levels.

Gold Growth stopped at a strong level of $2000 by Alisabbaghi on TradingView.com

Calendar events

Mon Apr 3, ISM MANUFACTURING PMI (MAR)

Wed Apr 5, ADP NONFARM EMPLOYMENT CHANGE (MAR)

and on Fri Apr 7 NONFARM PAYROLLS (MAR) is our main event’s impact on gold.