Gold Price Falls to $2,314 Amid Bearish Sentiment and Key Support Levels
Gold (XAU/USD) experienced fresh supply during Thursday's Asian session, halting a three-day winning streak and retreating from its weekly
Gold (XAU/USD) experienced fresh supply during Thursday’s Asian session, halting a three-day winning streak and retreating from its weekly peak of around $2,341-$2,342.
This pullback follows the Federal Reserve’s (Fed) unexpected hawkish stance on Wednesday, overshadowing the softer US consumer inflation data.
The Fed now anticipates only one rate cut in 2024, down from three projected in March, driving investors away from non-yielding assets like gold.
Fed’s Hawkish Surprise Impact
The shift in the Fed’s projections has pushed US Treasury bond yields higher, bolstering the US Dollar.
*Gold price licks wounds near four-week lows ahead of US jobs data, Fed decision.*
*US Dollar rebounded with US Treasury bond yields on Tuesday, as risk-off flows underpinned.*
*Further downside looks likely for Gold price amid bearish RSI on the daily chart.* pic.twitter.com/w0dUy1UU57— Fatima Sheikh (@FatimaS53512071) May 1, 2024
This development further pressures the US Dollar-denominated gold price. Despite this, geopolitical tensions in the Middle East and renewed political uncertainty in Europe may prevent deeper losses in gold.
US Economic Data Ahead
Traders are now focusing on Thursday’s US economic releases, including the Producer Price Index (PPI) and Weekly Initial Jobless Claims data, for potential short-term trading opportunities.
US Economic Events for Thursday, June 13th, 2024
All times Eastern (UTC -4:00)$SPY $QQQ #NASDAQ #SPX #PPI #EIA #natgas #Yellen #BoJ #forex
Important events for today include:
• Weekly Initial Jobless Claims at 8:30 AM
• May Producer Price Index (PPI) at 8:30 AM pic.twitter.com/Sae1K0mlGq— Jimmy_Turbo (@Jimmy__Turbo) June 12, 2024
The Fed’s latest policy decision has already impacted market sentiment, with the Bureau of Labor Statistics (BLS) reporting no change in the Consumer Price Index (CPI) for May, the first such occurrence since June last year.
The annual CPI rate slightly declined to 3.3% from 3.4%, while the core CPI rose 0.2% for the month and 3.4% annually, below the 3.5% consensus forecast.
Fed’s Forecasts and Global Political Uncertainty
The Fed’s decision to keep interest rates unchanged at its two-day policy meeting, along with the revised forecast of the benchmark rate dropping to 5.1% this year, suggests just one rate cut in 2024. This contrasts sharply with the three cuts anticipated in March.
The Fed also raised its neutral rate forecast to 2.8% from 2.6%, providing some support to the US Dollar and further pressuring gold prices.
Political uncertainty in the Eurozone, especially with French President Emmanuel Macron’s call for snap elections, could lend some support to safe-haven assets like gold.
Additionally, Thursday’s US macroeconomic data might offer short-term trading opportunities ahead of the Bank of Japan’s (BoJ) policy decision on Friday, potentially adding to market volatility.
In conclusion, while the Fed’s hawkish outlook weighs on Gold (XAU/USD), geopolitical factors and upcoming economic data could create opportunities for traders. The current price forecast for gold remains cautious, with market participants closely monitoring these developments.
Gold Price Forecast – Technical Outlook
Gold (XAU/USD) is currently trading at $2,314.165, down 0.51%. The 4-hour chart indicates the key pivot point at $2,325.10. Immediate resistance levels are $2,336.79, $2,348.12, and $2,365.66. On the downside, immediate support levels are $2,287.82, $2,271.74, and $2,254.20.
Technical indicators reveal that the Relative Strength Index (RSI) is at 45, suggesting neutral momentum. The 50-day Exponential Moving Average (EMA) stands at $2,329.23, indicating a bearish trend.
In conclusion, gold is exhibiting a bearish outlook below $2,325. A break above this level could signal a shift towards a bullish bias, while remaining below it reinforces the bearish sentiment.
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