Fundamental analysis Gold for 09.05.2024
Gold prices (XAU/USD) exhibit a cautiously positive trend this Thursday, influenced by a complex interplay of economic signals and geopolitical dynamics. Despite an absence of major economic news earlier in the week, gold faces resistance due to a robust U.S. dollar and anticipations of persistent high U.S. interest rates, evidenced by a 0.5% increase in the U.S. Dollar Index to 103.2. Recent hawkish statements from Federal Reserve officials, including Boston Fed President Susan Collins, New York Fed President John Williams, and Minneapolis Fed President Neel Kashkari, emphasize a prolonged period of high rates as inflation control remains a central focus. This stance is further reinforced by a downward adjustment in market expectations, with the probability of a September rate cut now reduced to just under 55%.
On the demand side, the global appetite for gold is bolstered by significant over-the-counter market investments and robust buying activities in Asia, particularly from central banks like the People’s Bank of China, which added 60,000 troy ounces to its reserves in April, marking 18 months of continuous purchases. This is coupled with heightened demand from China and India.
Meanwhile, geopolitical tensions in the Middle East, notably the tentative ceasefire discussions between Hamas and Israel, which remain far from conclusive, contribute to the market's risk-averse sentiment. This could potentially enhance gold's appeal as a safe-haven asset.
Looking forward, gold traders are keenly awaiting more Federal Reserve commentary and forthcoming economic indicators such as the U.S. Initial Jobless Claims and the Consumer Sentiment Index, which might provide deeper insights into the broader economic landscape influencing gold prices. The U.S. Initial Jobless Claims are expected around 212,000, and the Consumer Sentiment Index is projected to decline slightly from 77.2 to 76.3. Such data will likely play a crucial role in shaping market dynamics and gold's valuation in the near term.
The Alligator indicator indicates that the market is in a consolidation phase, as indicated by intertwined moving averages. This means that there is currently no clear trend direction. Awesome Oscillator (AO) and Accelerator Oscillator (AC) are in the gray zone, indicating neutrality with a hint of divergence. This divergence indicates a potential change in direction, but is not a reliable single signal for opening positions. Given these indicators, the main scenario involves continued sideways movement within certain support and resistance levels in anticipation of a clearer signal from the market or economic indicators that could determine the next trend.
Main scenario (SELL)
Recommended entry level: Current price
Take profit: 2300.00
Stop loss: 2320.00
Alternative scenario (BUY)
Recommended entry level: 2320.00
Take profit: 2345.00
Stop loss: 2300.00