Global Gold Analyticals March 31, 2024 – Analysis and Forecasts – March 31, 2024
Gold Weekly Technical and Fundamental Analysis – March 31
In the first half of the year global gold last week Ignoring the strength of the US dollar, it started rising to a very important level of $2200.
The strength of global gold ounces has risen so much that it has broken previous resistance levels and reached the important level near $2,240.
With the overall market’s attention focused on important reports, such as next week’s NFP news, the possibility of a technical correction ahead of a further rally in global gold next week is not entirely unexpected.
Events in the gold market last week:
The U.S. Dollar Index, which was technically in a correction phase as the foreign exchange trading week began last Monday, had a strong start to its first business day for global gold ounces (in fact, gold opened at $2165 and is now around $2181).
Keep in mind that the US Dollar Index, known as DXY in the foreign exchange market, is an indicator of the dollar’s strength against six other major international currencies.
However, statements by some Federal Reserve officials on the same Monday blocked further gains for gold.
Atlanta Federal Reserve Bank President Raphael Bostic said he expects the U.S. central bank to cut interest rates only once this year instead of three. Lisa Cook, other branch manager The Fed added that cutting interest rates too early or too late also poses risks to the U.S. economy.
Global gold on Tuesday london trading session It crossed the important $2200 level several times in a row, but these gains turned into declines. New York trading session.
The main reasons for the decline in gold prices from the high of $2200 to $2167 were technical corrections and strong data from the United States. We will discuss this later.
According to the latest report, U.S. durable goods orders increased 1.4% in February compared to the previous month, following a 6.9% decline in January.
On Thursday, ounces of gold worldwide fell. Tokyo Trading Session In the absence of strong economic and fundamental news, it has started to rise again towards the important level of $2200.
Interestingly, even the hawkish comments from Fed officials failed to push the dollar higher or gold lower. As a result, global gold remained at a critical level of $2200.
For example, a prominent Federal Reserve member named Christopher Waller pointed out that the central bank is in no hurry to lower interest rates.
He also emphasized that the Fed may need to keep interest rates in their current range for a longer period to help achieve the 2% inflation target on a sustainable path.
The Bureau of Economic Analysis (BEA) announced Thursday that real gross domestic product (GDP) growth in the fourth quarter increased to 3.4% from the previous forecast of 3.2%.
Soon after, a weekly report on initial U.S. unemployment claims was released. According to the latest news, unemployment claims for the week ending March 23 fell to 210,000 (as you know, the lower this number, the stronger the US dollar and vice versa).
Then came Friday, when the entire market was awaiting an important report on US personal consumption expenditures (PCE).
As mentioned earlier, this index is one of the key indicators of U.S. inflation that Federal Reserve officials regularly monitor to determine monetary policy.
U.S. inflation, as measured by the annual personal consumption expenditures (PCE) price index, rose to 2.5% in February, according to data released Friday by the Bureau of Economic Analysis (BEA).
The announced figure is in line with market expectations, ahead of January’s figure of 2.4% by 0.1%.
Additionally, excluding food and energy prices, the core PCE, which Fed officials value highly, increased by 2.8% annually. It is worth noting that this report is consistent with economists’ predictions.
Important events for the gold market next week:
Looking ahead to the upcoming week in the gold market, it is expected to be the most important week in terms of fundamental news for global gold and other financial assets. This could potentially determine the direction of the Fed’s interest rate policy.
On Monday, the Institute for Supply Management (ISM) will release its Purchasing Managers’ Index (PMI) report for U.S. factories for March.
economic analyst Key PMI headlines predicted to reach 48%. If the reported number is above 50 for any reason, the initial market reaction is likely to reflect rapid growth in the US dollar.
One of the important components of this report is the paid price index, which is an inflation factor.
Even after falling below the critical 50-point mark for eight consecutive months, the paid price index remained above this critical level.
If the paid price index falls below the important 50 (indicating a pullback in factory output growth) for any reason, it could challenge the dollar and put pressure on it, even if the key PMI headlines are positive.
On Tuesday, the Bureau of Labor Statistics (BLS) will release its February Job and Labor Turnover Survey (JOLTS) report.
If the reported figure is not significantly different from January’s figure of 8.86 million, the market reaction is likely to be neutral.
Wednesday will see markets await the US ADP employment change report and ISM non-manufacturing PMI data.
If the ADP employment change report is weak for any reason, traders and the overall market may begin to speculate that the U.S. labor market is weak, especially ahead of Friday’s NFP report.
Additionally, at the end of the trading day on Wednesday, The market reaction to the paid price index or inflation component of the PMI Services survey in the US session could be similar to the reaction to Monday’s PMI factory report.
Finally, the BLS will release its National Labor Market Report (NFP) next Friday.
economic analyst NFP in March was expected to increase from 200,000 in February to 275,000.
The important part of the report is that the projected unemployment rate in the United States remains constant at 3.9%. Additionally, monthly wage inflation, measured as the change in average hourly earnings, is expected to increase from 0.1% to 0.3% per month.
Remember last February when the NFP figure rose to 275,000, exceeding market expectations and causing the US dollar to fall? The reason is that the January and December reports were revised downward.
Now what if February NFP Unless market expectations are exceeded again and a downward revision to the previous report is not announced, the US dollar will strengthen and global gold will face downward pressure, at least in the initial reaction to this news.
On the other hand, if NFP numbers are weaker than market expectations, the dollar will come under pressure and gold will continue to grow.
A well-known CME Group tool shows that about 40% of market participants currently believe the Fed will keep interest rates on hold in June.
Important note: Don’t forget that if Friday’s jobs report shows strong numbers, traders (40%) will not only abandon their June rate cut speculation, but will also consider a 75 basis point cut in 2024. Doubts about the Fed’s dot plot signal.
If this scenario plays out, global gold will experience a major correction and the dollar will strengthen. Conversely, if the NFP reading is weak, the dollar will fall while gold will remain strong.
Weekly technical analysis for gold:
Last week, the lower and upper limits of gold price were 2163 and 2236. If you open today’s daily chart and draw the RSI indicator, you can see that the highest point of the indicator is rising within the overbought zone and showing 76. .
This means that the bulls are still in control of the market, but should be ready for a correction from new historical highs at any time.
Moreover, if you draw a rising channel on the daily chart, you can see global gold rising beyond the upper boundary of the channel.
Key support levels in global gold analysis:
If gold falls, the first important support level would be around $2220. If gold moves out of this area, the next important price level is $2210. If market weakness pushes gold lower, the next major levels would be $2200 and $2190.
Key resistance levels in global gold analysis:
If gold moves higher, the first important resistance level would be $2240. If gold successfully moves through this area, the next major level would be $2250. If market strength pushes gold higher, the next resistance levels would be $2,260 and $2,270.
disclaimer: This article is for informational purposes only and should not be considered financial advice. Please consult a qualified financial advisor before making any investment decisions.
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