#Gold Technical Analysis #24K99 News, spot gold continues to be under pressure in early European trading on Wednesday, currently around $2314/ounce; earlier, the gold price fell to $2309.58/ounce, a new intraday low. Dhwani Mehta, FXStreet senior analyst, published a latest article on Wednesday to analyze and forecast the technical trend of gold prices.
Mehta wrote that in early trading on Wednesday, the gold price touched a new low of $2310/ounce, continuing its previous decline. From the technical perspective of the daily chart of gold, the view of bearish gold prices seems more convincing due to the failure of the triangle pattern and the relative strength index (RSI) for put options.
On Tuesday, stimulated by Bollman, a member of the Federal Reserve Board of Directors, speaking in a hawkish tone, the US dollar strengthened and spot gold plummeted nearly $15.
Spot gold closed down $14.80 on Tuesday, down 0.63% at $2,319.33 per ounce.
Bollman, a member of the Federal Reserve Board of Directors, expects not to cut interest rates in 2024, and postpones the expected time of interest rate cuts to 2025.
Bollman said in a speech on monetary policy and banking capital reform on Tuesday that she believed that "several inflationary upward risks" would affect her outlook on monetary policy. Bollman expects US inflation to remain high for a period of time and there are still some inflationary upward risks, so it is not yet an appropriate time to cut interest rates.
In the Q&A section, Bollman said that her economic forecast does not include any interest rate cuts for the remaining time in 2024; instead, she has postponed the previously expected time of interest rate cuts to 2025.
Cook, a member of the Federal Reserve Board of Directors, said on Tuesday that although "inflation has slowed down and the tightness of the labor market has eased", the timing of interest rate cuts is still unclear.
Mehta said that the hawkish comments from the Federal Reserve have negatively affected gold prices. CME's "Federal Reserve Watch" tool shows that the market continues to expect a 68% chance of interest rate cuts by the Federal Reserve in September.
Mehta said that on Wednesday, gold traders will get clues from US housing data, and the sentiment around the expected interest rate cuts by the Federal Reserve will continue to drive the trend of gold prices. In addition, the capital inflow at the end of the six-month period may continue to play a role and have a significant impact on the value of the US dollar and gold prices. Investors' anxiety before the French and British elections next week may also support the demand for safe-haven US dollars and make gold prices fragile.
The Latest Technical Analysis of Gold
Mehta pointed out that after the gold price fell below the triangle support level (which was $2320/ounce at that time) on the 14th day, it had witnessed the failure of the symmetric triangle pattern. The relative strength index (RSI) on the 14th day maintained a position below 50, proving that the bearish trend of gold prices is reasonable.
In addition, the bearish cross of the 21-day SMA and the 50-day SMA continue to play a headwind role for gold prices.
Mehta said that if gold sellers gather momentum, the initial support area for gold prices is expected to be $2300/ounce. If it falls below this level, this will make the low point of May 3, which is $2277/ounce, a focus again.
(Spot gold daily chart source: FXStreet)
Mehta added that on the other hand, gold prices need to recapture the 21-day moving average of $2320/ounce at the close of the day in order to restore the momentum of recovery from the monthly low of $2287/ounce.
If gold rebounds further, the gold price will challenge the two-week high of $2366/ounce, and then the target of buyers will be the high point of June 7, which is $2388/ounce.
At 16:05 Beijing time, spot gold was reported at $2314.40/ounce.