Gold (US$ / OZ) | Wednesday 31/5/2023 | Ethan Smythe
Fundemetal
Gold prices rose higher at market open on Tuesday in response to a fall in US Treasury Yields following Washington's push to raise the US debt ceiling. This development sparked optimism with respect to recent fears of a US debt default on Tuesday. Congress now has up until June the 5th to consolidate this policy which still presents a degree of uncertainty as to whether this outcome will be met. Joe Biden went on to express his confidence and reassurance to markets that the debt will bill gets passed by the Senate. So what's the verdict? We anticipate that should the bill get passed we could see US yields continue to fall putting further upward pressure on gold throughout the remainder of the year.
Technical
From a technical standpoint, gold is currently trading at the bottom of its monthly upward channel and appears to be showing significant signs of strength. This strength appears to be the result of previously mentioned fundamental drivers. As of now, gold is testing the 200 MA, if we can get a clear break of the 200 MA and find support above this key level we should expect to see price raid the $2000 level. Provided this outcome does in fact occurs we further anticipate significant resistance at the $2000 level as buyers begin to realize gains. This would be an optimal level to set a profit target on any longs taken on the break of the 200MA. After price has begun to settle and the bulk of profit-taking has occurred we expect buyers to accumulate and break the $2000 level. If the price finds support above $2000 and breaks its previous ATH we expect gold to try and reach the top of its channel at around $2100.
Fundemetal
Gold prices rose higher at market open on Tuesday in response to a fall in US Treasury Yields following Washington's push to raise the US debt ceiling. This development sparked optimism with respect to recent fears of a US debt default on Tuesday. Congress now has up until June the 5th to consolidate this policy which still presents a degree of uncertainty as to whether this outcome will be met. Joe Biden went on to express his confidence and reassurance to markets that the debt will bill gets passed by the Senate. So what's the verdict? We anticipate that should the bill get passed we could see US yields continue to fall putting further upward pressure on gold throughout the remainder of the year.
Technical
From a technical standpoint, gold is currently trading at the bottom of its monthly upward channel and appears to be showing significant signs of strength. This strength appears to be the result of previously mentioned fundamental drivers. As of now, gold is testing the 200 MA, if we can get a clear break of the 200 MA and find support above this key level we should expect to see price raid the $2000 level. Provided this outcome does in fact occurs we further anticipate significant resistance at the $2000 level as buyers begin to realize gains. This would be an optimal level to set a profit target on any longs taken on the break of the 200MA. After price has begun to settle and the bulk of profit-taking has occurred we expect buyers to accumulate and break the $2000 level. If the price finds support above $2000 and breaks its previous ATH we expect gold to try and reach the top of its channel at around $2100.