- The weakness of the strength factors and the continued gains of the US dollar contributed to the selling of gold.
- This led to the price of gold moving towards the support level of $2,309 per ounce, the closest point to moving towards the support level of $2,300 per ounce.
- The selling operations coincided with investors waiting for US economic reports this week to clarify the timeline for cutting US interest rates by the Federal Reserve.
The main points of focus include the core personal consumption expenditures index data, the Federal Reserve’s preferred inflation measure, along with consumer spending and income, the third estimate of GDP growth for the first quarter, and the trade balance for goods. Meanwhile, San Francisco Federal Reserve President Mary Daly stated on Monday that she does not believe the US central bank should cut interest rates until policymakers are confident that inflation is heading towards 2%. Investors are now anticipating statements from more Fed officials who are scheduled to speak throughout the week, including Federal Reserve Governors Lisa Cook and Michelle Bowman.
On the geopolitical front, a US-backed proposal to end the eight-month Gaza war has been thrown into doubt after Israeli Prime Minister Netanyahu agreed to only a “partial” ceasefire.
Another factor weighing on the gold market, the US dollar index DXY rebounded to trade above 105.6 on Tuesday after losing 0.3% in the previous session. Investors cautiously await US personal consumption expenditures inflation data and fresh comments from the Federal Reserve this week to better guide US interest rate expectations. Overall, markets are also bracing for the first US presidential debate between Joe Biden and Donald Trump on Thursday, as well as the French elections this weekend.
Meanwhile, the dollar rose to its highest level in nearly two months last week, as the Fed’s cautious approach to interest rate cuts contrasted with other major central banks’ earlier decision to begin monetary easing. The greenback has fallen against most major currencies so far this week and is at risk of falling against the yen as it approaches the 160-per-dollar level that previously prompted Japanese authorities to intervene in currency markets.
On the stock exchanges front, the S&P 500, Nasdaq close higher as Nvidia shares resume rally.
On Tuesday, the S&P 500 and Nasdaq rose 0.4% and 1.2%, respectively, snapping a three-day losing streak, while the Dow Jones Industrial Average fell 296 points. According to trading, the technology sector outperformed after the previous day’s heavy sell-off, during which investors shifted away from semiconductor and artificial intelligence stocks to other sectors. Also, Nvidia shares rose 6.7%, snapping a three-day losing streak that wiped more than $400 billion off the company’s market value. Likewise, the communications services sector advanced, while real estate and materials sectors declined.
Furthermore, Microsoft shares rose 0.7% after the European Union accused the company of antitrust violations related to Teams. Similarly, Apple and Amazon shares rose 0.4%, Meta shares rose 2.3%, and Alphabet shares rose 2.7%. In terms of economic data, home price growth slowed in April.
Gold Price Forecast and Analysis Today:
According to the performance on the daily chart the price of gold is on a downward correction path that will be supported by moving towards and below the support level of $2,300 per ounce. From the support level of $2,277 per ounce, we prefer to return to buying gold again, but without risk. Global geopolitical tensions, along with record purchases by global central banks and the beginning of some global central banks to ease their policies, are all important factors for a continuous upward path for gold in the coming period. According to the direct recommendations page, we still prefer to buy gold from every downward level.
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