Gold sell

Gold prices broke out of a corrective channel

22 June 2023 163
Gold prices broke out of a corrective channel

Gold prices are approaching a three-month low amid new discussions on interest rate hikes by the U.S. Federal Reserve (Fed).


As Fed Chair Jerome Powell said in a speech to lawmakers on Capitol Hill, further rate increases could be considered quite likely if the current economic trend continues.


Edward Meir, a metals analyst at Marex, said the market still believes in the probability of monetary policy easing by the central bank. Therefore, the precious metal's value has declined, but not collapsed.


According to the CME FedWatch tool, traders estimate a 72% chance of an interest rate hike by 25 basis points next month.

As Meir said, the gold price might fluctuate between $1,900 and $1,980 before the next meeting of the U.S. regulator.

 

It is worth noting that the precious metal's pricing has remained almost unchanged since the U.S. government debt ceiling freeze.

 

Significant change in the yellow metal price was recorded in 2011 after the increase in the debt limit and during the banking crisis of 2008. At that time, market participants used gold as a safe-haven asset to keep their savings.  


Now gold may be affected by the collapse of several banks and a pause in the Fed's rate hikes.


Traders now expect data on weekly initial jobless claims in the U.S. at 12:30 GMT. The indicator reflects the number of people who filed applications for unemployment benefits for the first time during the reporting period. It is used to calculate the national unemployment rate. The number of applications is projected to fall to 260,000 from the previous level of 262,000. Confirmation of the forecast will be considered as a positive factor for the American currency.


Gold prices broke out of the 1935.00—1984.00 range. The price fixation behind the corridor support indicates bearish momentum, but with an obstacle of the 1900.00 round level.

 

Signal:

The short-term outlook for gold suggests selling.

The target is at the level of 1900.00.

Part of the profit should be taken near 1918.00.

The Stop-loss is set at 1958.00.


Bearish trend has a short-term character, so the trade volume should not be more than 2% of your balance.


This content is for informational purposes only and is not intended to be investing advice.

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