Market Overview
On Thursday, gold prices faced a barrier at $2,320, stopping their climb from recent low points over the past four weeks. This pause happened after the Federal Reserve said it would wait for clearer signs of lower inflation before considering cutting interest rates.
Because of this announcement, the yields on U.S. Treasury bonds went up, with the 10-year yield reaching 3.45%. This increase also boosted the dollar index by 0.5%, pushing it up to 103.7.
Moreover, the stock market seemed upbeat, with the S&P 500 going up by 1.2%. This positive sentiment in stocks made gold less attractive to investors seeking safety.
Federal Reserve’s Influence on Gold Prices
In a press conference, Fed Chair Jerome Powell said there wouldn’t be any more interest rate increases soon, even though worries about inflation continue.
Usually, when interest rates are low, gold does well because it becomes more attractive compared to investments that earn interest.
But even though gold stayed above the $2,300 support level, showing that traders are being careful, it might help keep prices steady for now.
Economic Data Impact on Gold Prices
Now, the market is looking forward to new economic information coming from the United States. On Friday, everyone’s paying attention to the Nonfarm Payrolls (NFP) report, which is expected to show that 250,000 jobs were added.
Also, reports from Thursday, like the Challenger Job Cuts and Initial Jobless Claims, are expected to show that the job market is still strong. These reports are giving traders an idea of where things might be headed.
Current Market Dynamics
Despite bouncing back overnight, gold didn’t keep up its momentum because people think U.S. interest rates will stay up for a while. Right now, spot gold is trading at about $2,319.98 per ounce, even though it briefly fell below $2,300 earlier this week.
What happens next for gold’s price will depend a lot on the upcoming NFP report and other economic indicators.
Gold Prices Forecast
Today’s analysis of gold (XAU/USD) for May 2, 2024, shows that the precious metal is trading at $2,318.25, which is a slight decrease of 0.17%. Right now, gold is trading just below its pivot point at $2,326.19, suggesting that the market sentiment is a bit bearish.
The immediate levels where gold might face resistance are at $2,352.13, $2,378.36, and $2,417.99. To turn the bias back to bullish, gold needs to overcome these levels. On the other hand, support is found at $2,280.78, with further support at $2,243.84 and $2,212.02, indicating potential levels where the price might stop declining.
Looking at technical indicators, the 50-day Exponential Moving Average (EMA) is at $2,324.68, close to the pivot point. Additionally, the 200-day EMA at $2,282.56 provides extra support just below the current price.
For gold to avoid downward pressure, it needs to stay above $2,326. If it manages to do so, it might boost bullish sentiment. However, if it fails to hold above this level, it could strengthen the bearish outlook.
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