Gold is adjusted, building up positions for further growth

The banking crisis in the US still reflects the sentiment of traders. Let's remember that the March news about the bankruptcy of California's Silicon Valley Bank and New York's Signature Bank became the catalyst for high volatility in the market. Bank failure was the biggest collapse of the banking system since the 2008 crisis.

Precious metals rushed “northward”, while oil began to get cheaper. The price of the yellow metal exceeded $2,000 per ounce for the first time since the spring of 2022.

The Federal Reserve System was raising rates from 0.25% to 5.00% during the year (this is the highest rate since 2007), and this supported the US dollar.

According to the latest FOMC forecast, the Fed is likely to increase rates again by 25 basis points at the next meeting in May. The Central Bank's interest rate will be around 5.125% by the end of 2023, as per the median forecast. After that, it will decrease to 4.3% by the end of 2024. However, Fed Chairman Jerome Powell noted that the influence of credit crunch on economic activity and inflation is unknown, and therefore rate decisions will be made on a meeting-by-meeting basis. A possible increase in the rate has already been taken into account by the market, so the dollar will quietly give up its position.

The precious metal has long-term upside prospects together with the banking crisis and the Fed's hints that monetary policy is about to start rolling back.

Since Friday, gold has been demonstrating a downward correction in the range of 1935.00 - 2005.00, moving towards the lower border of the H1 range on the timeframe.

If we consider the pricing of gold from the point of view of wave analysis on the D1 timeframe, then the price is in the process of forming the third ascending wave after breaking through the level of 1955.00.

The price of gold is in a range of profitable purchases, considering the long-term outlook for the precious metal's pricing.

Signal:

Long-term prospects for gold are buying.

Target is at the level of 2100.00.

Part of the profit should be fixed around the level of 2015.

Stop-loss is around the level of 1915.00.

The bullish trend is long-term, so choose a trading volume of no more than 1% of your balance.