Gold prices increased after the US mixed data, showing the economy’s attempts to achieve stability amid the Federal Reserve’s (Fed) efforts to fight inflation.
The price of the precious metal rose 0.4% on Monday compared to the end of Friday’s session. Investors are analyzing weak employment data suggesting a gradual slowdown in the US economy and easing fears of markets heading into a period of high inflation.
According to Chicago Fed President Austan Goolsbee, April’s reports point out that the economy is not overheated. This strengthens the case for easing monetary policy this year, said the official.
As FedWatch Tool CME showed, markets estimate the likelihood of rate cuts in the US in September by 67%. Lower rates will reduce the opportunity cost of holding gold.
The yellow metal rose around 12% this year despite higher inflation and uncertainty about the timing of monetary policy easing by the Fed. The metal reached record highs in April due to active buying by central banks, demand in Asian markets and investment in safe-haven assets amid the Middle East conflict.
The main argument in favor of rising gold prices is still the world's unstable geopolitical situation.
On the technical level, gold prices are forming an uptrend on the H4 chart.
In terms of wave analysis, the price is forming the fourth downward wave. The Bulls Power indicator (standard values) are in the positive zone, showing the growth potential and transition to the fifth ascending wave.
Signal:
The short-term outlook for GOLD suggests buying.
The target is at the level of 2,415.00.
Part of the profit should be taken near the level of 2,355.00.
A stop-loss could be placed at the level of 2,240.00.
The bullish trend is short-term, so trade volume should not exceed 2% of your balance.
This content is for informational purposes only and is not intended to be investing advice.
