Will gold break through 2450 or pull back to 2350?
On Tuesday (May 21) in the European session, gold rose by about $15 in the short term and is currently trading at 2414-2422. Gold hit a record high of $2450 on Monday due to the news of the death of the Iranian president, which also triggered a discussion on whether gold has the hope of hitting the $2500 mark in the short term. However, as the US session approached on Monday, gold fell rapidly, falling more than $30 from its historical high. Will gold continue to pull back or continue to rise? What other events will affect the trend of gold in today's trading day?
Recent speeches by Atlanta Fed President Bostic and Fed Vice Chairman Jefferson show that the Fed remains cautious about the judgment that inflation will fall back to the target level. These remarks have a positive impact on the US dollar, reducing market expectations for the Fed to cut interest rates sharply, thereby pushing up US Treasury yields. As a result, the price of gold has fallen from its historical high of 2450.
Market dynamics and future prospects
Market sentiment has become cautious before the speeches of New York Fed President Williams and Fed Governor Waller. Meanwhile, gold traders are avoiding new positions ahead of the release of the Fed minutes and Nvidia earnings, two events that could have a significant impact on the dollar and risk sentiment.
Upcoming speeches from Fed officials today
Fed Governor Waller will speak on the U.S. economy.
New York Fed President Williams will deliver opening remarks at the event.
Richmond Fed President Barkin will deliver a welcome speech.
Atlanta Fed President Bostic will deliver a welcome speech.
Fed Governor Barr will participate in a fireside chat.
Outlook for interest rate policy
In his speech on April 14, Waller mentioned that although recent data showed that the Fed had made some progress on its inflation target, further interest rate increases were still needed. He emphasized that the extent of the rate hike will depend on future economic data and credit conditions.
Williams said that although inflation data has declined, it is not enough to prompt the Fed to cut interest rates in the near term. He pointed out that there is no sign of a need to change the monetary policy stance, and he does not expect inflation to move towards the 2% target in the short term.
Technical Analysis of Gold Price
The Relative Strength Index (RSI) of gold price on the daily chart shows bullish signs, which indicates that the decline of gold may not be large. The RSI indicator remains around 62.60, above the midline, which further supports the stable trend of gold price.
If gold price can break through the 2441 resistance level, it will challenge the 2450 psychological level. If gold price continues to rise and breaks through 2450, it may rise further to 2500. However, if gold price falls below 2400, it may fall back to the low of 2374 last Friday. If it falls further, the next target will be the 21-day simple moving average (SMA) of 2344
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