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Gold Price Review Interrupted by Failure to Defend March Low – By ASC


Gold Price Discussion Items

Gold prices crossed March lows ($ 1890) as it traded to new monthly lows ($ 1882), and the precious metal may face further declines in the next few days if the former resistance zone around November highs ($ 1877) fails to offer support.

Gold Price Review Interrupted by Failure to Defend March Low

Gold prices are trading below the 50-Day High School ($ 1940) for the first time since February despite recent deep sales the US stock marketand it looks as if a decline in risk appetite will not help to raise the ingot as the Federal Reserve is widely expected to deliver a series of rate hikes in the coming months.

Source: CME

The FedWatch CME tool reflects almost 100% probability for a 50bp Fed rate hike on May 4 as the Federal Open Market Committee (FOMC) shows greater willingness to normalize monetary policy at a faster pace, and developments coming out of the US may keep gold prices at bay. under pressure as the US Personal Consumption Expenditure Price Index (PCE) update is expected to show a slowdown in inflation.

DailyFX Economic Calendar image for US

The core PCE, the Fed’s preferred measure of price growth, is expected to narrow to 5.3% from 5.4% per annum in February, which will mark the first decline since August, and continued efforts by major central banks to tame inflation may continue to curb gold’s attractiveness as the FOMC “expects to begin reducing holdings of Treasury securities and agency debt and agency mortgage -backed securities at the next meeting.

Thus, ingots may face problems ahead of the next Fed rate decision as market participants prepare for higher U.S. interest rates, and a failure to defend lowest Mac ($ 1890) increase the scope for further decline in the price of gold as it trading below the 50 Day High School ($ 1940) for the first time since February.

Gold Price Daily Chart

Daily chart image of gold price

Source: Trade Outlook

  • The price of gold have reversed direction after failing to test record highs ($ 2075), with a decline from annual highs ($ 2070)ing sell signal in Relative Strength Index (RSI) because the oscillator falls back below 70.
  • The price of gold overcomes Mac lows ($ 1890) as it trades below the 50-Day SMA ($ 1940) for the first time since February, with the precious metal going against former resistance zone around November highs ($ 1877).
  • A break/close below the $ 1876 region (50% shift) opens the $ 1859 (23.6% shift) area, with the next interest zone entering around $ 1837 (38.2% shift) to $ 1847 (100% expansion).
  • Need to move back up Fibonacci overlapped around $ 1916 (38.2% expansion) to $ 1929 (23.6% reversal) to bring the top target back on the radar, with the steps above 50 Day High School ($ 1940) open $ 1990 (78.6% displacement) area.

Recommended by David Song

Characteristics of a Successful Trader

— Written by David Song, Currency Strategist

Follow me on Twitter at @DavidJSong

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