2023-05-10 06:54:00
It records moderate gains to offset the heavy losses incurred on Friday during the two-day rebound period.
Fundamental analysis
Market sentiment remains distorted amid mediocre Fed survey details. A cautious mood ahead of the US debt ceiling talks and divergent Fed talks keep gold traders on their toes. Gold surged past $2,010 after Friday’s sharp losses during the two-day uptrend through early Tuesday, up 0.12% on the day near $2,023 by press time.
Thus, the yellow metal benefits from the cautious market mood ahead of the US negotiations on avoiding default, however, the recent recovery in the US dollar and Treasury yields, in addition to inflation expectations, makes gold buyers very cautious. DXY is defending the previous day’s recovery near 101.50 amid stronger signals from US 10-year and 5-year St inflation expectations and Fed data.
The impact of the dollar as a global reserve currency may be among the market’s biggest fears fueled by the statements of the US Treasury Secretary, Janet Yellen. Archyde.com indicated that US Treasury Secretary Janet Yellen contacted senior businessmen and financiers to explain the “catastrophic” impact that a US default on its debt might have on the United States.
But in my personal opinion, it is like a trap for gold buyers, as there will be a solution and America will not allow its hegemony over the world to collapse, which is what gold sellers are waiting for.
Conversely, the less impressive details of the Fed’s quarterly bank loan survey showed tougher benchmarks and weaker demand for commercial and industrial loans for large and medium-sized firms as well as small businesses during the first quarter and seemed to entice gold traders.
As a result, index futures struggled for clear directions despite posting moderate losses around 4150 while the 10yr and 2yr yields struggled to extend a three-day uptrend during early Tuesday.
Looking ahead, the weak calendar may allow the price of gold to rise before the main talks about the debt ceiling in the White House. Any negative comments during the talks are more likely and could weigh on the US dollar and push gold temporarily, so we advise those with weak accounts to be careful.
Technical analysis of the gold price
Gold price is rising in a $20 trading range that includes the 100-hours moving average (HMA) and the 200-HMA respectively near $2030 and $2010.
Adding strength to the uptrend candidate is a 1 week old horizontal resistance area while the upward sloping trend line from last Tuesday is adding strength to the $2010 support confluence.
However, slow MACD signals and a flat RSI (14) indicate that XAU/USD will continue to slow to the upside.
It should be noted that $2060 holds the key for gold’s rise towards refreshing all-time highs currently around $2080, while the psychological factor $2000 acts as an additional bearish filter to watch the bears in gold before taking control.
The expected scenario for gold in the near term
We expect gold to witness a temporary rise to 2032, then to decline again to 2015, then to rise again, but a four-hour closing above 2033 ends the decline scenario and heads to 2045.
The expected scenario for gold in the medium term
We expect gold to witness a retest of the 2047 level, then enter into a downward wave that may be strong and head to 1981, and we witness a process of correction and re-rise again to 2025, then a stronger decline according to time analysis, but gold’s closing four hours above 2062 ends any final decline scenario and heads to new levels
closures
Close four hours lower 2007 heading into 1980.
Four hour close above 2033 heading into 2047.
Saif El Deeb
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