Gold prices started the new week weaker, breaking a two-day streak of gains. However, they’re still trading in the same range as they have been for the past week. Investors are feeling more confident because there’s hope that tensions between Iran and Israel might ease. This confidence is causing money to move away from safe-haven assets like gold. Also, people are betting that the Federal Reserve will keep interest rates high for a while longer because inflation in the US is still high. This is putting more pressure on gold, which doesn’t pay interest like other investments do.
The downside for gold prices might not be too bad because people are guessing that big central banks will lower interest rates this year. Plus, as the global economy gets worse, it should stop gold from dropping too much. Traders aren’t rushing to do anything and are waiting to see what happens with some important economic reports coming out this week. These reports include data on how well businesses are doing around the world, as well as how the US economy performed in the first three months of the year and how much prices went up for things people buy.
Daily Digest: Gold Price Squeezed as Safe-Haven Appeal Dims, Fed Expectations Stay Hawkish
Iran said they won’t fight back after Israel shot some missiles on Friday. This made people less worried that things might get worse in the Middle East, and it made the price of gold go down.
Investors thought the Federal Reserve would cut interest rates sooner, but now they think it will happen in September instead. They also don’t think there will be as many rate cuts in 2024 as they thought before.
The President of the Chicago Federal Reserve, Austan Goolsbee, said that the prices of things in the US haven’t changed much this year. He thinks it’s better to wait and see what happens with prices before making any big decisions.
The interest rate on the main 10-year US government loan is high compared to the past few months. This makes the US dollar stronger and puts more pressure on gold, which doesn’t earn any interest. People are worried that the world’s economy is slowing down. They think most big banks will cut interest rates together later this year. This could help gold prices go up compared to the US dollar. People who trade money might wait to see reports about how well businesses are doing globally, how much money the US made in the first part of the year, and how much people are spending in the US before deciding what to do next.
Technical Analysis: Gold Price Shows One-Week Trading Range, Bullish Outlook Maintains Strength
In simple terms, the gold price has been moving within a specific range for about a week, forming a shape like a rectangle on short-term charts. Despite this, it’s still considered a good time for buyers because the price has recently gone up a lot. Also, indicators on daily charts show that while the price isn’t as high as before, it’s likely to keep going up. But for buyers to feel more confident, they’d want to see the price stay above $2,400. If it drops below $2,364-2,363, there might be more people selling, which could bring the price down to around $2,325-2,322 or even $2,300.
