Eyes on Fed, GOLD in narrow range with bearish conditions

Market attention turns to the Federal Reserve's monetary policy decision on May 1 and upcoming nonfarm payrolls data.

Data released last week showed US gross domestic product fell short of target, while the core personal consumption expenditures (PCE) price index, the Fed's preferred inflation measure, stagnated at growth of 2.8% year-on-year for the second consecutive month.

Key data due for release this week include European inflation and US labor market indicators, while the Federal Reserve is scheduled to hold a two-day meeting on Tuesday and Friday. is expected to keep the basic interest rate unchanged but with a hawkish tone.

The last time Federal Reserve Chairman Jerome Powell spoke, he said policymakers would likely keep borrowing costs high for longer than previously expected, citing a lack of progress in inflation falls and the labor market continues to be strong.

Despite the Fed's postponement of interest rate cuts, gold prices are still up more than 13% this year and reached a record high earlier this month. The rise in precious metals prices over the past two months has been linked to central bank buying, strong demand in Asian markets, especially China, and rising geopolitical tensions from Ukraine to the Middle East.

Analysis of technical prospects for XAUUSD
The current gold price range is still quite narrow and has not changed much compared to what was published in the weekly issue published on Sunday.
Technical conditions remain bullish in the short term with the closest support coming from the EMA21 level and the $2,322 technical point followed by the 0.236% Fibonacci retracement level.
A more negative case for gold prices can only be clearly seen when it sells off below the 0.236% Fibonacci retracement level, at which point the target level could reach the upper edge of the price channel and beyond the 0.382 Fibonacci level. % in short term. So, for open buy positions should be protected behind the 0.236% Fibonacci level.
On the other hand, gold holding above the EMA21 level will be a necessary condition to continue aiming for the short-term targets of 2,345 USD and more to the level of 2,365 USD.
During the day, the technical outlook for gold prices is bearish with the following notable technical levels.
Support: 2,315 - 2,284USD
Resistance: 2,345 - 2,365USD

🪙SELL XAUUSD | 2361 - 2359

⚰️SL: 2365

⬆️TP1: 2354
⬆️TP2: 2349

🪙BUY XAUUSD | 2304 - 2306

⚰️SL: 2300

⬆️TP1: 2311
⬆️TP2: 2316

Trade closed: target reached:

Plan BUY HIT TP1 +90pips. Heading to TP2😵

Comment:

Comment:

⭕️The dollar declines ahead of the US Federal Reserve’s decision

The US dollar witnessed clearly stable movements during early trading on Wednesday, but the greenback quickly declined, affected by growing market concerns about weak US economic growth.

Comment:

According to its Financial Stability Report released on Wednesday, the RBNZ said that although global inflation is showing signs of cooling and financial markets predict interest rates will fall next year, "there remains a risk of new or persistent inflationary pressures". This could cause global interest rates to remain high for longer, putting pressure on households, businesses and the financial system.

Comment:

🔺Spot gold prices fell sharply during trading on Thursday, erasing some of the gains achieved by the precious metal in the previous session, as a result of the strength of the US dollar and the rise in US Treasury bond yields, which coincided with a calming of geopolitical tensions in the Middle East and the decline of fears of a regional war breaking out in the region.

Comment:

Goldman Sachs economists said Wednesday they still expect two interest rate cuts this year after a “mostly quiet but peaceful” meeting of the Federal Open Market Committee (FOMC).

Comment:

Fed's Bowman : I remain open to raising the federal funds rate at a future meeting if data show inflation progress stalling or reversing.

Comment:

The dollar declined clearly during Friday's trading, coinciding with the release of US employment data, which reinforced expectations of a US interest rate cut soon.

Comment:

The Fed has been actively combating high inflation for more than two years, with a series of interest rate increases starting in March 2022, totaling more than five percentage points. This aggressive action has been unprecedented in four decades. Although inflation has declined from its peak in mid-2022, it remains above the Fed's 2% target, which has been a key part of the Fed's policy approach since 2012.