The gold price showed its first weekly loss of 2.3% in six as investors booked profits after the metal’s months-long rally. Since mid-February, the metal has risen 17%, reaching new highs despite fading expectations for easing policy from the Fed.
Purchases of the precious metal by central banks and increased demand in Asian markets including China, have stabilized gold prices as investors are seeking protection against sticky inflation. According to Ole Hansen of Saxo Bank AS, the gold market is experiencing a long overdue and relatively aggressive, but healthy correction.
According to Friday's U.S. inflation data, the core CPI climbed 0.3% in March and 2.8% from a year earlier, the same as the prior month. This forced investors to question the Fed's next move as the data indicate progress toward the central bank’s 2% goal has stalled.
A Bloomberg survey of traders showed that the Fed may cut rates once or twice this year, starting in November. However, there are concerns that it won't happen at all in 2024. High rates reduce the appeal of gold, which is a non-performing asset.
The main argument in favor of rising gold prices remains the unstable geopolitical situation in the world.
From the technical point of view, the gold price is forming an uptrend on the H4 timeframe.
In terms of wave analysis, the price is forming the fourth descending wave. The Bulls Power (standard values) is positive, which indicates the potential for growth and the transition to the fifth ascending wave.
Signal:
The short-term outlook for GOLD is to buy.
The target is at the level of 2415.00.
Part of the profit could be fixed near the level of 2366.00.
The Stop-loss could be placed near the level of 2280.00.
The bullish trend is of a short-term nature, so it is suggested to limit the trading volume to no more than 2% of your capital.
This content is for informational purposes only and is not intended to be investing advice.
