Global Gold Analyticals May 19, 2024 – Analysis and Forecasts – May 19, 2024
Technical and Fundamental Analysis of Gold – May 19
If you change the period to weekly, Global Gold Ounces in 2 Weeks The decline continued its upward trend for the second week in a row, surpassing $2,422.
In fact, global gold ounces could increase by about 2.30% in the week ending May 17.
All traders and gold investors are now looking forward to statements and comments from Federal Reserve (FRB) members in May.
This will help you understand roughly when the Fed’s policy will shift from hawkish to dovish and help you adjust your trading positions more precisely.
Events in the gold market last week:
Global gold opened at $2360 on Monday, May 6, fell to $2332, rose to $2364, and finally closed at $2336.
Global gold ounces fell by more than 1% last week and Monday due to selling pressure from weak markets.
However, given the rise in global gold in the second half of last week, Monday’s decline in gold was more of a correction due to a lack of fundamental catalyst than anything else.
And then Tuesday arrived. The day when the market waits for the US Producer Price Index (PPI) report.
According to data released Tuesday by the U.S. Bureau of Labor Statistics: Producer Price Index (PPI) In April, it increased by 2.2% annually.
It is worth noting that this was better than the previous month (1.8% growth rate in March) and was in line with the forecasts of economic analysts.
The US Dollar Index’s immediate reaction to the PPI news was a decline in the dollar and a rise in global gold. In fact, the global ounce opened at $2,336 and rose to nearly $2,360.
As you know, on this same Tuesday, the markets were awaiting the Federal Reserve Chairman’s speech.
Federal Reserve Chairman Jerome Powell pointed out that PPI data was contradictory during his speech at the Foreign Bankers Association annual meeting last Tuesday. He reiterated that restrictive policies or economic contraction could take longer than expected to further reduce inflation.
In fact, these dovish comments from the Federal Reserve Chairman limited the losses for the US dollar and limited the gains for global gold.
And then Wednesday arrived. It was a day when markets were awaiting a very important report on US Consumer Inflation (CPI).
Last Wednesday, May 17, the BLS reported annual U.S. inflation as follows: Consumer Price Index (CPI), It decreased from 3.5% in March to 3.4% in April.
At the same time, annual core inflation excluding food and energy hit 3.6%, in line with market expectations and analyst forecasts.
Additionally, both monthly inflation and core monthly inflation (Core CPI) were reported at 0.3%.
After the US inflation news broke, yields on US 10-year Treasury bonds immediately fell by more than 2%, allowing global gold to rise to a critical level of $2400.
Meanwhile, other U.S. data showed retail sales were unchanged in April at $705.2 billion.
What is important and interesting is that in the second half of last week, senior Fed officials took a cautious stance to reduce dollar losses and allow the dollar to outperform its rivals.
Due to this precise, important and important factor, global gold adjusted to around $2371 last Thursday.
For example, John Williams, president of the Federal Reserve Bank of New York, has said there is no need to lower interest rates in the near term.
In fact, Williams said in an exclusive interview with Reuters and in a personal statement: “After months of disappointing data, we have seen positive changes.”
Richmond Federal Reserve (Fed) President Thomas Barkin also told CNBC that the latest CPI data shows inflation is not where the Fed wants it to be.
finally atlanta federal reserve bank President Rafael Bostic also said, “If the decline in inflation continues, it would be appropriate to lower interest rates from the end of 2024.”
Overall, first-half performance was down on Friday, the last business day of the financial market week, but gold rose as capital flows flooded into the market as the weekend approached.
In fact, global gold reached its highest level last month, crossing the important $2422 level and closing at $2414 per share.
Next week’s events in the Forex and Gold markets:
Next Monday, May 20th, senior members of the Federal Reserve of America named Bostic, Waller, Barkin, Jefferson, and Mester. Several people will be speaking on behalf of the market and traders.
On Tuesday, May 21, US Treasury Secretary Yellen is scheduled to address the markets.
Powell, Barkin, Williams, Brainard and Bostick are then also expected to address investors.
Next Wednesday, May 22nd, there will be two reports on existing home sales and crude oil inventories, followed by the important May Fed meeting.
On Thursday, May 23rd, two important news items are expected to be announced in the markets. First reports weekly initial unemployment claims at 4 p.m., then at 5:15 p.m. Purchasing Managers’ Index (PMI) May for service and manufacturing. Both of these reports are high-impact news that could impact the dollar and other financial assets.
The number 50 is important for both manufacturing and services PMIs, so if the reported number falls below 50 for any reason (indicating contraction and contraction in US economic activity), the US dollar will come under immediate selling pressure.
This important factor could result in global gold strengthening once again and continuing its upward trend.
Conversely, if the reported number exceeds 50 for any reason (indicating growth and expansion of economic activity in the US services and manufacturing sectors), the US dollar will immediately strengthen and rise.
This key and essential factor could lead to a correction in global gold on Thursday.
So far, about 33% of the market believes the Fed will keep interest rates unchanged in September, according to a well-known CME Group tool.
Federal Reserve officials are unlikely to say whether September is the right time to cut interest rates, but their views on the economic outlook and inflation-related developments could affect the likelihood of a rate cut.
For the US Federal Reserve Policy Makers Announcement of changes in current bank policy before observing more economic data, including employment and inflation, will likely make investors skeptical about the timing of interest rate cuts starting in September.
This important factor could help the US dollar remain resilient against rivals and limit further gold gains.
If Federal Reserve officials express concerns about expanding labor market conditions or increasing uncertainty about the economic growth outlook, US Treasury yields could fall and XAU/USD could continue to rally.
As you know, the Federal Reserve is scheduled to release important meeting minutes this Wednesday.
In this regard, investors will be analyzing policymakers’ discussions on the interest rate outlook amid strong inflation numbers in the first quarter.
If, for whatever reason, Fed policymakers hint that interest rates are only expected to be cut once in 2024, the dollar will start to strengthen.
However, gold prices could continue their upward trend if the May minutes show that investors are expecting a one-time rate hike.
Weekly technical analysis of gold:
weekly technical analysis Gold price shows last week’s lower and upper price limits are 2332 and 2422.
If we open the daily gold chart now and draw the RSI indicator, we can see that the indicator is currently pointing upwards and showing a value of 65. This means the bulls are still in control and gold’s daily trend remains bullish.
Additionally, if we plot a rising channel on the daily chart, we can see that global gold is trading slightly above the rising channel.
Key support levels in global ounce analysis:
If gold falls, the first important support level will be the important area of $2400. If gold falls below this area, the next important price level would be $2390. If gold falls due to market weakness, the next important levels would be $2,380 and $2,370.
Key Resistance Levels in Global Ounces Analysis:
If gold moves higher, the first important resistance level would be $2422. If gold successfully surpasses this area, the next important level would be $2431. If the market rally pushes gold higher, the next resistance levels would be $2,440 and $2,450.
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.
happy trading
May Pip be in your favor!
