GOLD looks to regain $3,400 as focus shifts to Fed decision
Gold price extends the recovery rally toward $3,400 early Tuesday.
The US Dollar stays defensive amid Asian FX woes and Fed speculation.
Technically, the path of least resistance appears north for Gold price.
Gold price extends its recovery rally into the second straight day on Tuesday as buyers appear unstoppable amid a bearish sentiment around the US Dollar (USD) and escalating geopolitical tensions in the Middle East.
Despite renewed optimism of the US reaching trade deals with some of its trading partners as early as this week, US President Donald Trump’s erratic trade policies continue to unnerve markets, allowing Gold price to recover lost ground.
Additionally, the Asian forex exchange chaos also keeps the haven demand for the precious metal alive and kicking. Markets are speculating that some of the Asian central banks are planning to revalue their currencies to shield against the impact of the US tariffs.In this regard, the Taiwan Dollar (TWD) leapt 8% against the USD on Monday, contributing to the Greenback’s renewed downside. Earlier on, the Hong Kong central bank sold the local currency to restrain it from strengthening against the USD.
Furthermore, escalating geopolitical tensions between Israel and Yemeni Houthi rebels and Russia-Ukraine continue to act as a tailwind for the traditional store of value Gold price.
Therefore, Gold price seems to remain in a constructive space heading into the two-day US Federal Reserve policy meeting starting later on Tuesday. Commenting on the upcoming Fed event, the Wall Street Journal’s Fed whisperer, noted that the Fed “prepares for difficult judgments and emerging divisions regarding when to cut interest rates.”
Gold optimists shrugged off easing bets of a June interest rate cut amid an improving economic outlook, as trade headlines and geopolitics dominate, in anticipation of the Fed rate call and Chair Jerome Powell’s comments.
Data showed on Monday that the Institute for Supply Management’s (ISM) Services PMI Index rose to 51.6 from 50.8 in March. Steve Miller, chair of the ISM services survey, said, “April change in indexes was a reversal of March’s direction,” noting rises in new orders, employment, and supplier deliveries indices.
Daily technical analysis
Gold price holds the bounce from the critical 21-day Simple Moving Average (SMA) support, now at $3,260.The 14-day Relative Strength Index (RSI) holds firm above the midline near 62, suggesting that there is more room to the upside.
The latest leg higher needs acceptance above the $3,400 barrier for Gold buyers to flex their muscles toward the channel support (now resistance) at $3,467.Further up, the record high of $3,500 will come into play.
On the flip side, the immediate support is seen at $3,300 on a pullback, below which the 21-day SMA at $3,260 will be challenged again.A failure to defend the latter will fuel a fresh downside move toward the $3,150 psychological level.
GOLD looks to regain $3,400 as focus shifts to Fed decision
Gold price extends its recovery rally into the second straight day on Tuesday as buyers appear unstoppable amid a bearish sentiment around the US Dollar (USD) and escalating geopolitical tensions in the Middle East.
Despite renewed optimism of the US reaching trade deals with some of its trading partners as early as this week, US President Donald Trump’s erratic trade policies continue to unnerve markets, allowing Gold price to recover lost ground.
Additionally, the Asian forex exchange chaos also keeps the haven demand for the precious metal alive and kicking. Markets are speculating that some of the Asian central banks are planning to revalue their currencies to shield against the impact of the US tariffs.In this regard, the Taiwan Dollar (TWD) leapt 8% against the USD on Monday, contributing to the Greenback’s renewed downside. Earlier on, the Hong Kong central bank sold the local currency to restrain it from strengthening against the USD.
Furthermore, escalating geopolitical tensions between Israel and Yemeni Houthi rebels and Russia-Ukraine continue to act as a tailwind for the traditional store of value Gold price.
Therefore, Gold price seems to remain in a constructive space heading into the two-day US Federal Reserve policy meeting starting later on Tuesday. Commenting on the upcoming Fed event, the Wall Street Journal’s Fed whisperer, noted that the Fed “prepares for difficult judgments and emerging divisions regarding when to cut interest rates.”
Gold optimists shrugged off easing bets of a June interest rate cut amid an improving economic outlook, as trade headlines and geopolitics dominate, in anticipation of the Fed rate call and Chair Jerome Powell’s comments.
Data showed on Monday that the Institute for Supply Management’s (ISM) Services PMI Index rose to 51.6 from 50.8 in March. Steve Miller, chair of the ISM services survey, said, “April change in indexes was a reversal of March’s direction,” noting rises in new orders, employment, and supplier deliveries indices.
Daily technical analysis
Gold price holds the bounce from the critical 21-day Simple Moving Average (SMA) support, now at $3,260.The 14-day Relative Strength Index (RSI) holds firm above the midline near 62, suggesting that there is more room to the upside.
The latest leg higher needs acceptance above the $3,400 barrier for Gold buyers to flex their muscles toward the channel support (now resistance) at $3,467.Further up, the record high of $3,500 will come into play.
On the flip side, the immediate support is seen at $3,300 on a pullback, below which the 21-day SMA at $3,260 will be challenged again.A failure to defend the latter will fuel a fresh downside move toward the $3,150 psychological level.
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