Global Gold Analyticals April 22, 2024 – Analysis and Forecasts – April 22, 2024
Weekly Technical and Fundamental Analysis of Gold – April 22
Global gold prices rose more than 2% in the week ending April 19. In fact, this is the fifth straight year of increases. Global gold week It is increasing. It is worth noting that the RSI indicator on the weekly period is very significant and has been in overbought territory for some time, currently showing a value of 80.
Traders are closely monitoring important data from the United States for the continuation of global gold trends next week, as well as news related to Iran and the Islamic Republic of Israel.
Events in the gold market last week
As soon as the global foreign exchange market opened last week, gold gained momentum and began to rise. In fact, the price of gold started at $2344 and rose to $2387. The main reason for this was the conflict between Iran and Israel last weekend.
According to recent reports, the Islamic Republic of Iran retaliated against Israel’s attack on its consulate in Syria by launching multiple drones and missiles at Israel. The missile did not cause any damage, but this important factor fueled gold’s move last week.
Looking at the daily gold chart, we can see that global gold rose more than 1.5% on Monday, achieving its highest gain in a single day.
On the same Monday, the United States released its monthly retail sales report.
According to the latest report, U.S. retail sales rose 0.7% in March. The announced figure was higher than market expectations of 0.3%, which gave the US dollar index a significant gain on the first business day of the week.
It is noteworthy that global gold, which generally shows an inverse, negative relationship with the dollar index, ignored this and continued to grow.
Market sentiment improved slightly on Tuesday after Western countries urged Israel to refrain from further escalation of the Middle East conflict and announced plans to tighten sanctions on Iran.
This important fundamental made further gains for gold difficult on Monday.
If you look at the gold daily chart, you can see a long red candle forming on Tuesday.
It is worth noting that Shahini’s statement from the Federal Reserve said the yield on the 10-year U.S. Treasury note rose to its highest level since early November, nearing 4.7%, capping a continued upward trend in the XAU/USD.
Chairman Jerome Powell The Federal Reserve of America said recent data suggests inflation has not made much headway this year.
He also added that if inflation continues to trend upward, interest rates could be kept within the current range for as long as necessary.
Additionally, San Francisco Federal Reserve President Mary Daly noted that inflation must be guaranteed to reach the central bank’s 2% target before making any policy changes.
Daly continued: “The worst thing we can do is take immediate action when no urgent action is needed.”
Global gold then began a downward correction on Wednesday due to a lack of significant fundamental news. In fact, the price of gold started at $2383 and fell to around $2354.
On Thursday, as the market stalled, gold showed little reaction and traded within a narrow range (it opened at $2361, rose to $2392, and eventually closed at $2379).
In the early hours News of Israel’s retaliatory attacks on Iranian airspace emerged during the Asian trade session. This important factor has led traders to seek safe haven in gold.
Gold’s initial reaction to this news was an immediate jump above the key psychological level of $2400 per ounce (gold prices opened at $2379 and rose to $2417, eventually closing at $2392).
Israel did not immediately confirm the retaliatory strike against Iran, but several news agencies cited U.S. officials as reporting that Israel had carried out such an attack.
For this reason, market sentiment has shifted from a cautious environment to a calm environment, and these important factors have prevented gold from rising further.
A senior Iranian official told Reuters there were no immediate plans to retaliate for the action as it was not clear who was behind the incident.
CNN later reported that local intelligence sources said direct cross-border attacks between Israel and Iran had ended.
Gold adjusted below 2400 in the last trading day due to the mentioned factors and ended the week at a price of $2392.
Forex and Gold Market Events This Week
Traders in financial markets will be closely following news related to war and tensions in the Middle East this week. If you are a gold trader, don’t overlook this issue. In times of war and crisis, technical analysis alone cannot provide answers, and important support and resistance levels may not behave as expected.
If tensions between the Islamic Republic of Iran and Israel escalate for any reason this week, gold could continue to rally. However, gold is a safe haven asset and attracts many buyers in such situations.
Conversely, if tensions between Iran and Israel decrease, global gold will continue to correct and fall.
The first big news this week is This is the 2024 first quarter gross domestic product (GDP) report to be released by the U.S. Bureau of Economic Analysis.
If the US economy shows stronger annual growth than analysts predict, the US dollar could maintain its current strong position and impact XAU/USD.
It is important to note that global gold has ignored the rise in US Treasury 10-year bond yields and the resulting rise in the US dollar index since early April!
Global gold could come under downward pressure if, for any reason, any significant geopolitical factors fall out in the coming week.
If the GDP report is better than expected and geopolitics fade away, the dollar could strengthen as traders become more confident that the Federal Reserve will be able to keep interest rates in June within their current range.
Keep in mind that the odds of the Fed cutting rates by 25 basis points in June are less than 20%, according to CME Group, a popular tool for interest rates.
Finally, don’t forget that on Friday BEA plans to release the following data: Personal Consumption Expenditures (PCE) The price index is the Fed’s preferred measure of inflation for March.
What is the PCE index?
Because households are one of the most important components of the economic cycle, their choices and decisions about consumption are critical to economic interpretation.
The United States has a variety of indicators to measure inflation, with PCE being one of the most important.
The Personal Consumption Expenditures Price Index, known as PCE, evaluates changes in the prices of goods and services purchased by U.S. consumers. In practice, the PCE index registers inflation in broad consumer costs and is used to reflect consumer behavior.
Remember, generally, whenever the PCE index does better than market expectations, the dollar strengthens and gold begins to fall.
of course, GDP Thursday’s report also includes the PCE index, so it is unlikely that this week’s PCE report will have an impact on the market.
Weekly technical analysis of gold
Last week, the lower and upper limits of gold price were 2324 and 2417. If we now open the daily gold chart and plot the RSI indicator, the peak of this indicator is moving upwards within the overbought area and has a value of 73.
This means that control is still in the hands of market bulls, but we should expect gold to correct from new historical highs at any time.
Also, if you draw a rising channel on the daily chart right now, you can see that global gold has now left the rising channel ceiling and is moving significantly upward.
Key Support Levels in Global Ounces Analysis
If gold falls, the first serious support level would be around $2,380. If gold penetrates below this area, the next important price level is $2370. If market weakness pushes gold lower, the next important levels would be $2360 and $2350.
Key resistance levels in global ounce gold analysis
If gold rises, the first important resistance level will be $2400. If gold successfully surpasses this area, the next important level would be $2410. If market strength pushes gold higher, the next resistance levels would be $2,420 and $2,430.
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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