Gold prices remained stable in Asian trading on Monday, maintaining at $1,234 per ounce as investors adjust their positions in anticipation of the upcoming Federal Reserve meeting.
Following a peak earlier in April, the price of gold has retreated due to reduced demand for safe-haven assets and expectations of sustained higher U.S. interest rates.
Recent economic data from the United States, including a higher-than-expected PCE price index for March at 0.3% monthly and 2.7% annually, has strengthened the belief that the Federal Reserve may prolong higher interest rates, potentially postponing rate cuts until September or later. This scenario increases the opportunity cost of holding non-yielding assets like gold.
Despite recent declines, gold prices remain higher year-over-year, driven by concerns that prolonged high interest rates could dampen global economic growth.
Market dynamics are influenced by positive equity performance and ongoing geopolitical risks such as the Russia-Ukraine conflict, which continue to sway gold prices. Fluctuations in the U.S. dollar, which rebounded sharply against the Japanese Yen and retreated from two-week lows, have also impacted gold prices as the precious metal tends to move inversely to the dollar’s strength.
Investors are now focusing on upcoming economic releases, particularly the U.S. Nonfarm Payrolls (NFP) report expected to show an addition of 210,000 jobs for April. The Federal Open Market Committee (FOMC) meeting starting Tuesday is also anticipated to provide insights into future monetary policy and its potential impact on gold prices.
Key factors to watch include the FOMC meeting outcomes and U.S. economic data, as these will shape market expectations on interest rates and subsequently influence gold prices. Ongoing geopolitical tensions and inflation indicators will also play a role in determining gold’s trajectory, particularly as it serves as an inflation hedge.
Current gold prices are at $2,334.82, showing a slight decrease of 0.20%. The metal is positioned just above its pivot point at $2,325.66, indicating potential upward momentum if this level holds. Immediate resistance levels are at $2,370.56, followed by $2,418.45 and $2,463.94.
On the downside, significant support levels lie at $2,290.40, $2,248.71, and $2,212.49. The 50-day Exponential Moving Average (EMA) stands at $2,339.52, supporting a bullish outlook if maintained above the current price. Conversely, a break below $2,325.66 could lead to a more pronounced decline in gold prices.
