Gold prices declined slightly on Monday. The main reason for this was the uncertainty about maintaining interest rates at the same level by the Federal Reserve System (Fed).
Friday's data on U.S. nonfarm payrolls was much stronger than expected. The number of employed rose to 339K. But the unemployment rate rose to a 7-month high of 3.7%, and salary growth slowed.
This involves a tightening of monetary policy by the U.S. Fed, which is fighting high inflation. On this background, gold decreased in price.
However, some representatives of the regulator earlier offered to maintain rates at the same level in June to assess the consequences of tightening monetary policy.
This scenario is estimated to be 80% likely by market participants.
The situation connected with the U.S. debt ceiling is also shown in the price of gold.
Over the weekend, Joe Biden, president of the United States, approved a project to limit the country's national debt limit, thereby preventing a default.
The fact of signing the bill indicates the end of the crisis that has concerned Washington and the financial markets in recent months.
The Republicans' votes were as follows: 314 voted for the bill, while 117 voted against it. Among Democrats, 63 approved the bill, while 36 did not.
However, the cancellation of the default did not help to improve the credit rating of the U.S., the rating agency Fitch Ratings said at the weekend.
Precious metals reacted on the news of the suspension in the U.S. government debt limit with a slight decrease in quotes at the beginning of Monday's trading.
Meanwhile, the long-term forecasts for precious metals remain positive amid worsening global economic conditions.
Gold quotes played back all the news of the last week. After the price went out of the downtrend on the H4 timeframe there was a possibility of a trend reversal, but the news background corrected the prices in the range of 1935.00 - 1984.00. The precious metal quotes are closing to the support of the range, the pullback from which will be a signal of price movement to the resistance of the flat corridor.
Signal:
The short-term prospects for gold are to buy near the 1935.00 level.
The target is at the level of 1975.00.
Part of the profit should be fixed near the level of 1955.00.
The stop-loss is at the level of 1925.00.
This content is for informational purposes only and is not intended to be investing advice.
