GOLD in Range Area Rebound on Support and Resistance Levels
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Our technical analysis indicates that GOLD is currently within a range-bound area, where the price has rebounded from the resistance zone towards the support levels. We have successfully closed several positions in recent trades, capitalizing on the oscillations within this value range market. To illustrate the downtrend bias, a bearish channel has been drawn, suggesting that the price is inclined towards further downward movement.
Our strategy revolves around anticipating a new rebound in price after it reaches the resistance area and retraces towards the lower side of the chart. In terms of fundamental aspects, the uncertainty surrounding the Federal Reserve's rate-hike trajectory is considered a significant factor providing some support to the non-yielding gold price. However, a substantial appreciating move still appears to be elusive.
Thursday's underwhelming macro data from the United States has raised doubts about the extent to which the Fed can continue raising rates, sparking speculations that the current policy tightening cycle may be nearing its end. Nevertheless, the Fed has indicated earlier this week that borrowing costs might still need to rise by up to 50 basis points by the end of the year. This, coupled with a slight uptick in US Treasury bond yields, has supported a modest recovery in the US Dollar from its one-month low recorded earlier on Friday. This moderate USD strength could potentially impede bullish positioning around the US Dollar-denominated gold price.
Furthermore, a more hawkish outlook from other major central banks may also serve as a limiting factor for upside potential in the yellow metal. Notably, the Reserve Bank of Australia (RBA) and the Bank of Canada (BoC) surprised the market with a 25 basis point rate hike last week. The European Central Bank (ECB) has also raised rates by 25 basis points, reaching the highest level in 22 years, and signaled further tightening measures to curb inflation.
These factors contribute to the complex dynamics affecting the gold market, and we will closely monitor the evolving situation to identify optimal trading opportunities. It is important to adapt our strategies accordingly and exercise caution in light of the various influences shaping the market landscape.
Our strategy revolves around anticipating a new rebound in price after it reaches the resistance area and retraces towards the lower side of the chart. In terms of fundamental aspects, the uncertainty surrounding the Federal Reserve's rate-hike trajectory is considered a significant factor providing some support to the non-yielding gold price. However, a substantial appreciating move still appears to be elusive.
Thursday's underwhelming macro data from the United States has raised doubts about the extent to which the Fed can continue raising rates, sparking speculations that the current policy tightening cycle may be nearing its end. Nevertheless, the Fed has indicated earlier this week that borrowing costs might still need to rise by up to 50 basis points by the end of the year. This, coupled with a slight uptick in US Treasury bond yields, has supported a modest recovery in the US Dollar from its one-month low recorded earlier on Friday. This moderate USD strength could potentially impede bullish positioning around the US Dollar-denominated gold price.
Furthermore, a more hawkish outlook from other major central banks may also serve as a limiting factor for upside potential in the yellow metal. Notably, the Reserve Bank of Australia (RBA) and the Bank of Canada (BoC) surprised the market with a 25 basis point rate hike last week. The European Central Bank (ECB) has also raised rates by 25 basis points, reaching the highest level in 22 years, and signaled further tightening measures to curb inflation.
These factors contribute to the complex dynamics affecting the gold market, and we will closely monitor the evolving situation to identify optimal trading opportunities. It is important to adapt our strategies accordingly and exercise caution in light of the various influences shaping the market landscape.
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