International gold prices fell slightly on Wednesday (May 29) as the U.S. dollar and U.S. Treasury yields remained stable ahead of the Federal Reserve’s release of key inflation data.
Spot gold continued its volatile trend at the beginning of the week and is currently declining slightly, with the lowest price reaching $2,334. On May 20, the gold price hit a historical high of $2,449.89.
In addition, there are still doubts in the market about the timing of the Fed’s first interest rate cut, while the possibility of another rate hike remains as inflation remains above target.
Investors are closely watching Friday’s release of core U.S. personal consumption expenditures (PCE) data, the Federal Reserve’s preferred inflation gauge.
The market expects the core personal consumption expenditures index to remain basically stable, but any signs of persistent inflationary pressures will boost the dollar, thereby weighing on gold.
The following is a technical analysis of the gold price trend:
Trend line analysis: Gold prices are currently in a key wedge pattern, with the lower edge of the wedge at $2,372/oz. If gold prices can close above this level, it will show strong buying interest.
Moving average: The short-term support for gold prices is at the 50-day moving average of $2,323/oz. If gold prices fall below this level, they may fall further to the psychological level of $2,300/oz.
Relative Strength Index (RSI): The 14-day RSI is currently above 50, around 52.60, indicating that gold prices maintain bullish potential.
Resistance and support levels: If gold prices can return above the 21-day moving average of $2,353/oz and continue to rise above the resistance level of $2,372/oz, it will provide support for the continued recovery of gold prices.
The upside target is to test the May 24 high of $2,384/oz, and further to the important psychological level of $2,400/oz.
Market Sentiment: While Middle East tensions and a pick-up in physical gold demand in India provided support for gold prices, a resurgent U.S. dollar and comments from Federal Reserve officials weighed on prices.
However, market optimism over China’s efforts to boost the real estate sector and the IMF’s upward revision of China’s GDP forecast may limit the downside for gold prices.
Author: Zhou Tong (Analyst) 29-05-2024
At 21:00 Hong Kong time, spot gold was quoted at US$2,340.26 per ounce.
#The above is only the author’s personal opinion and has nothing to do with the company’s position.
Hongfeng Gold Industry reminds you: Strategic suggestions are for reference only. There are risks in entering the market and you should invest with caution.