🖥 GOLD MARKET ANALYSIS AND COMMENTARY - [May 13 - May 17]

Gold prices surged to a three-week high of $2,375 an ounce on Friday due to weak U.S. economic data. The University of Michigan's preliminary May consumer confidence index fell to 67.4, lower than expectations. Additionally, there was an unexpected increase in initial jobless claims, reaching the highest level since last August. Investors are now awaiting next week's US Producer Price Index (PPI) and Consumer Price Index (CPI) data, which could greatly affect gold prices and the financial market overall.

If inflation data released next week shows a slowdown, it could lead to the Federal Reserve cutting interest rates in September. Financial markets expect the Fed to begin easing monetary policy in September, which could increase the appeal of gold due to lower interest rates. Traders currently see a 25% chance of a 0.5% rate cut in July, rising to nearly 49% in September. Changes in these expectations could impact gold prices. Data from the CFTC shows a decrease in gold futures contracts in the week ending May 7.

Financial data and economic events next week:
- Tuesday: US Producer Price Index (PPI), Federal Reserve Chairman Jerome Powell will speak in Amsterdam, Netherlands;
- Wednesday: US Consumer Price Index (CPI), US retail sales, New York Fed Empire State Survey;
- Thursday: US weekly initial jobless claims, US housing starts, Philadelphia Fed manufacturing survey.

📌Gold broke out of an accumulation triangle and has shown two days of significant increases on the daily chart. It surpassed EMA21 and the price channel edge, signaling a potential breakout. If it breaks the bearish channel and goes above $2,366, it could enter a bull run. To confirm bearish conditions, gold would need to fall below EMA21 and stay below $2,330. The current support level is $2,330.
The trading plan for next week will consider buying if the price returns to around the 2320 barrier, and selling if the price rises around the 2400 barrier.

Comment:

The global dollar system works best when dollars are abundant, when US interest rates are low and other currencies are rising. Easy access to the dollar boosts economic activity around the world. Currently, we are in the opposite situation. The positive recovery of the US economy has forced the Fed to raise interest rates, pushing the dollar higher and putting a strain on dollar-based business around the world.

Comment:

Comment:

Gold falls below $2,342

After rising to $2,348 at the beginning of the US session, gold is currently correcting back to nearly $2,341.

Fed Board of Governors member Jefferson continued to repeat the argument that the economy is still in a good position, and clear evidence is needed that inflation is falling sustainably toward the 2% target level to cut interest rates.

The focus this week is US CPI data for April

Comment:

Gold recovered to above $2,343 during the Asian session

After falling to nearly $2,336 during yesterday's US session following the announcement of the New York Fed's inflation expectations, gold is now up nearly $10 back to $2,343.

Comment:

🟡Gold futures rose during the Asian session

Gold futures rose during the Asian session on Tuesday.

According to the New York Mercantile Exchange's COMEX classification, June gold futures were trading at USD2,349.35 per ounce at the time of writing, up 0.27%.

It was previously trading at a high of USD2,350.50 per ounce. Gold may find support points at USD2312.90 and resistance at USD2385.30.

Comment:

Fed Chairman Powell reiterated the Fed has the ability to keep interest rates higher for longer

+++ Officials should be patient and let the restrictive policy work

+++ Lack of progress on inflation in the first quarter

Comment:

Gold prices touched $2,359 on Tuesday after data released by the US Department of Labor revealed that inflation rose above estimates. However, US government bond yields are sliding, an obstacle for the greenback.