The current strong resistance area above gold is around the level of 1990-2000 US dollars. Only by continuing to break through this area can gold reverse the downward momentum generated last week, and it is expected to continue to climb to a higher record. Below, pay attention to the support of the low of $1951 touched last week. If it falls below, it will threaten the support of the 1920-1900 area below.
On Friday (May 19), gold prices climbed more than 1%, regaining some of the losses earlier in the week, as the market renewed concerns about the stability of the banking sector and after a softer speech by Federal Reserve Chairman Powell , traders slashed bets on another rate hike. At the end of the U.S. market, spot gold closed at $1,977.54 per ounce, a sharp increase of $19.99 or 1.02%, with the intraday high hitting $1,984.22/oz and the lowest hitting $1,953.97/oz. For the week, spot gold fell 1.63%.
Powell said Friday that stress in the banking sector could mean rates don’t have to be as high in order to keep inflation in check. Speaking at a monetary conference in Washington, Powell noted that past moves by the Fed to deal with problems at midsize banks had largely prevented the worst from happening. But he noted that problems at SVB and other banks could still affect the wider economy. “Financial stabilization tools have helped stabilize conditions in the banking sector. On the other hand, developments there are tightening credit conditions and could weigh on growth, employment and inflation,” he told a monetary policy panel. Therefore, our policy rate may not need to be raised as much as to achieve our goal.” Powell’s dovish speech on monetary policy seems to have revived the feeling of light for gold bulls. Traders are now pricing in a 22.4% chance the Fed will raise rates by 25 basis points in June, down from 35.6% a day earlier, and traders see a 77.6% chance the Fed will keep rates in a range of 5% to 5.25% next month . Markets have a host of events and data to watch closely this week: the minutes of the Federal Open Market Committee’s (FOMC) May meeting, the latest data on U.S. GDP and the Fed’s favored personal consumption expenditures (PCE) inflation measure. If the data continues to further imply that the Fed is inclined to stop raising interest rates in June, it is expected that gold may face increased support from the bulls.
On the technical level, on the 4-hour level chart, we can also clearly see from the MACD below that a large number of main bulls gathered in the bottom area, and the red bull energy column began to increase, and the KDJ stochastic index went up, giving a signal of strengthening the short-term rebound. The current strong resistance area above is around the level of 1990-2000 US dollars. Only by continuing to break through this area can gold reverse the downward momentum generated last week, and it is expected to continue to climb to a higher record. Below, pay attention to the support of the low of $1951 touched last week. If it falls below, it will threaten the support of the 1920-1900 area below.
