Will global gold remain strong? – Analysis and Forecast – May 12, 2024

Weekly Gold Technical and Fundamental Analysis – May 12

If you change the period to weekly, global gold Ounces ended the week ending May 10 in the green and on an upward trend after two weeks of declines.

In fact, global gold prices rose more than 2.5% last week, closing at the $2,360 level.

It is worth noting that until last Thursday, global gold prices fluctuated between the $2,300 and $2,330 levels. Ultimately, gold ounces began to rise on Friday after a weak weekly jobless claims report, showing strength that surpassed expectations.

Next week all eyes will be on the important US inflation reports CPI and PPI. The results of these two reports, especially the CPI news, will clarify the direction of US central bank policy.

Events in the gold market last week:

Global gold opened at $2301 on Monday, May 6, fell to $2291, rose to $2332, and finally closed the business day at $2323.

In fact, it can be said that global gold ounces last week and Monday were very quiet and unchanged.

Global gold then started falling on Tuesday and Wednesday until it reached the critical level of $2300.

As mentioned earlier, the mentioned $2300 level has been acting as an important support level for some time.

Last week the Reserve Bank of Australia (RBA) held an important monthly meeting to determine the latest interest rate developments. as expected The RBA left interest rates unchanged at 4.35%, according to economic analysts and financial market experts.

The most important takeaway from the meeting is that despite traders’ concerns about RBA officials’ comments, the bank’s board did not make any comments or opinions that would change the RBA’s future policy. Indeed, RBA officials took a hawkish stance at previous meetings, which was not repeated at this meeting.

But current RBA director Michelle Bullock has reiterated that policymakers are prepared to take action if inflation remains high, particularly in the services sector.

In addition to the RBA, Bank of England (BoE) authorities also held an important monthly meeting last week. As economic analysts and financial market experts predicted, the BoE left interest rates unchanged at 5.25%.

As well as reading its own bank statements, the Bank of England also published the bank’s outlook for future monetary policy.

What’s interesting is that BoE officials outlined prospects for better economic growth and lower inflation for the future.

This means BoE officials are expecting better economic growth along with lower inflation in the future.

According to a recent report, the UK Gross Domestic Product (GDP) It increases to 0.2% in the second quarter, 0.9% in one year, 1.2% in 2026, and 1.6% in 2027.

Additionally, new forecasts from the Bank of England show that annual inflation rates are expected to decline to 1.9% over the next two years and 1.6% over the next three years. This is lower than the BoE’s target of 2%.

A very important point made by the current Governor of the Bank of England, Andrew Bailey, is that the market should expect a very sharp fall in interest rates.

After this statement, the British pound began to fall against the US dollar, disappointing its supporters.

And then Thursday came. A day when markets were awaiting an important report on the first US unemployment claims (this report is one of the most important news stories about the US job market and plays a key role in shaping US central bank policy).

According to a recent report released by the U.S. Department of Labor, the number of individuals applying for unemployment benefits increased by 231,000 in the week ending May 3!

This is the highest reading since November 2023, when the U.S. dollar began to decline compared to its peers. dollars).

Next week’s events in the Forex and Gold markets:

If there’s one important report coming out next week that could move the dollar and gold, it’s the US Consumer Price Index (CPI) news.

CPI, short for Consumer Price Index, is one of the most important indicators. indicator. Analysts call it the Consumer Inflation Index (CPI).

CPI is a monthly report of the amount paid by consumers for goods and services such as food, clothing, health care, and transportation. Therefore, the CPI index is an indicator of people’s purchasing power, i.e. inflation.

The CPI report is published in many countries with advanced economic structures, including the United States, but due to the United States’ influence on the economy, World economy, analysts follow US CPI We would like to inform you of the news in more detail.

Economic analysts and financial market experts expect monthly inflation in the United States to decrease from 0.4% to 0.3% in April compared to the previous month.

Additionally, the annual CPI is expected to decrease from 3.5% to 3.4%.

Remember, generally speaking, if US monthly inflation exceeds market expectations for any reason, the US dollar will strengthen and global gold prices will fall.

Conversely, if monthly consumer price inflation is lower than expected, the US dollar will weaken and global gold prices will rise.

Additionally, the Producer Price Index (PPI) report is scheduled to be released one day before the CPI release on Wednesday.

Analysts expect monthly producer inflation to remain steady at 0.2%. Monthly PPI It is expected to increase from 0.2% to 0.3%.

Between these two reports, CPI news will have a significant impact on the US dollar and gold prices, especially these days when the Federal Reserve is expected to cut interest rates in the coming months.

Lastly, please remember that the United States is scheduled to release its retail sales report, and China is scheduled to release its retail sales, industrial production, and home price indexes next Friday.

Weekly technical analysis of gold:

Last week, the lower and upper limits of gold price were 2291 and 2378. If you open the daily gold chart now and plot the RSI indicator, you will see that the highest point of the indicator is currently pointing upwards, at 60.

This means that control is still in the hands of market bulls and gold’s daily trend is still upward. Additionally, if we plot a rising channel on the daily time frame, we can see that global gold is trading just outside and slightly above the rising channel.

Key Support Levels in Global Gold Ounces Analysis:

If gold falls, the first important support level will be the important area of ​​$2350. If gold penetrates below this area, the next important price level is $2340. If market weakness pushes gold lower, the next important levels are $2330 and $2320.

Key Resistance Levels in Global Gold Ounces Analysis:

If gold moves higher, the first important resistance level would be $2370. If gold successfully surpasses this area, the next important level is $2380. If market strength pushes gold prices higher, the next resistance levels would be $2,390 and $2,400.

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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May Pip be in your favor!