FXTM information and reviews
FXTM
95%
OctaFX information and reviews
OctaFX
94%
XM information and reviews
XM
93%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
91%
HFM information and reviews
HFM
89%

Gold tests new April low


29 April 2022

Gold prices slid on Monday essentially following up on the downtrend that was carried out in the past week. It is evident that some of the economic developments in the past week had affected traders leading Gold’s price course into a selloff. In this report, we will identify and bring to light the key topics moving the Gold market allowing us to perform a brief and useful outlook for traders to work with. As a closing, our technical analysis will assist traders with specific price levels to keep in mind.

We commence with the very notable strength of the greenback in the past week. The greenback surged across the board and may have acted as a solid antagonistic movement for Gold’s price. The two instruments have traditionally kept an antagonistic nature and moved in the opposite directions, but not always.  The USD Index has moved higher for the past three consecutive weeks and has moved to a new two-year high in the current week so far.

So, the question here is what is driving the USD higher? First, market participants are seeing evidence that the Fed is probably about to move in a more aggressive stance with its interest rate. In the past week, during the IMF meeting, FOMC chairman Jerome Powell hinted for a double rate hike being on the table in the upcoming Fed meeting.

Moreover, the Fed’s $9 trillion balance sheet is expected to drop notably with the FOMC moving into a tightening stance. With all these actions expected to unfold in the incoming months and the USD gradually strengthening, Gold’s value may depreciate in the short term. In our opinion, the recent Gold selloff is a rather temporary and emotional reaction by traders as some risks or uncertainties may not be carefully considered at the moment. Lifting interest rates too high and too fast could possibly destabilize other segments of the economy which are currently enjoying favorable circumstances.

For example, the job market. Or in a different scenario may fail to bring Inflation lower which is currently the main target of the Fed. Higher inflation is currently driven mostly by energy prices and raw material bottlenecks which could be challenging to deal with since they relate to global dynamics.

Thus, even though the selloff for Gold was notable in the past days, we could say it is still controlled. However, there is a general sentiment that some of the largest central banks in the world including the FOMC, BoE, BoC, the ECB, and others will gravitate towards interest rate hikes in the next months. Gold traders may be driven toward this notion, but it may depend on how aggressive their steps will be.

XAUUSD H4 chart

In the following days, traders have a number of important economic releases coming up, that could potentially create volatility for the Gold market. On the 28th of April, we get the US GDP Advanced rate and the Core PCE Prices Advance rate both for Q1, while the weekly Initial Jobless claims figure is also to be released.  On the 29th of April, we get the Consumption, Adjusted rate for March, and the Final UoM Economic Sentiment figure for April. On the 2nd of May, we get the important ISM Manufacturing PMI figure and the Final Manufacturing PMI both for April.

#source

Share: Tweet this or Share on Facebook


Related

USD Index extends the breakout of 102.00 ahead of data
USD Index extends the breakout of 102.00 ahead of data

The index moves further north of the 102.00 barrier. The Fed starts its 2-day meeting later on Tuesday. CB Consumer Confidence, housing data next of note in the docket...

31 Jan 2023

Dollar flat as market braces for central bank decisions later in the week
Dollar flat as market braces for central bank decisions later in the week

The dollar was up modestly in early trading in Europe on Monday, at the start of a key week for central bank meetings on both sides of the Atlantic. By 03:00 ET (08:00 GMT), the dollar index...

30 Jan 2023

Mega Central banks, OPEC, NFP & Earnings week
Mega Central banks, OPEC, NFP & Earnings week

China Stock market returns from Luna New Year break. Chinese stocks rose while most other Asian equities fell as investors looked to interest rate decisions scheduled this week in the US...

30 Jan 2023

XAU/USD remains on the defensive around $1,925 ahead of US PCE
XAU/USD remains on the defensive around $1,925 ahead of US PCE

Gold price remains on the defensive for the second straight day amid modest US Dollar strength. Thursday’s upbeat US macro data fuels hawkish Fed expectations...

27 Jan 2023

XAU/USD retreats from multi-month top amid modest USD recovery, ahead of US GDP
XAU/USD retreats from multi-month top amid modest USD recovery, ahead of US GDP

Gold price pulls away from a fresh multi-month top amid a modest US Dollar strength. Bets for smaller rate hikes by Federal Reserve, recession fears should help limit losses...

26 Jan 2023

Microsoft: Still Trapped Within Descending Channel
Microsoft: Still Trapped Within Descending Channel

Microsoft Corp., an American multinational technology conglomerate currently ranked the third largest company by market capitalization ($1.728T) which actively engages...

24 Jan 2023


Editors' Picks

FXCM information and reviews
FXCM
87%
ActivTrades information and reviews
ActivTrades
86%
RoboForex information and reviews
RoboForex
85%
MultiBank Group information and reviews
MultiBank Group
84%
Libertex information and reviews
Libertex
83%
Vantage information and reviews
Vantage
83%

© 2006-2023 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.