Gold (XAU) Daily Forecast: Bearish Below $2333, US GDP Data in Focus

By:

Arslan Ali

Published: Apr 25, 2024, 06:48 GMT+00:00

Key Points:

Gold teeters near critical $2,300 support amid high U.S. interest rate expectations.
U.S. dollar strength and easing Iran-Israel tensions diminish gold's safe-haven appeal.
Upcoming U.S. economic data critical to influencing Federal Reserve's rate decisions.

In this article:

Gold

+1.66%

Market Overview

Gold prices dipped in Thursday’s Asian trading session, teetering on the brink of breaking below the critical support level of $2,300 per ounce. The diminished appeal of gold as a safe haven, coupled with expectations of persistently high U.S. interest rates, has placed significant downward pressure on bullion prices.

Impact of Geopolitical Tensions and U.S. Dollar Strength

The recent de-escalation in tensions between Iran and Israel has notably reduced demand for gold as a safety asset. Concurrently, the strength of the U.S. dollar, which remains near a five-month high, continues to exert additional pressure on gold prices.

Anticipated Data Releases and Potential Gold Movements

The upcoming economic data could trigger further movements in the gold market:

12:30 USD: Advance GDP q/q expected at 2.5%, down from 3.4%.
12:30 USD: Unemployment Claims projected at 214K, slightly up from 212K.
12:30 USD: Advance GDP Price Index q/q forecasted at 3.0%, up from 1.6%.
12:30 USD: Goods Trade Balance expected at -$91.1B, worsening from -$90.3B.
12:30 USD: Prelim Wholesale Inventories m/m anticipated at 0.2%, down from 0.5%.
14:00 USD: Pending Home Sales m/m forecasted at 0.3%, down from 1.6%.

These data points are critical as they provide context for the Federal Reserve’s policy decisions, which have a direct impact on gold prices. A hotter-than-expected inflation reading or hawkish signals from the Fed could dampen hopes for an interest rate cut in June, adding more pressure on gold in the near term.

Gold Prices Forecast

Gold – Chart

Gold is currently trading at $2315.51, marking a slight decline of 0.11%. The metal is trading below its pivot point at $2333.85, indicating a potential bearish bias in the near term. Key resistance levels are established at $2370.56, $2418.45, and $2463.94, which gold would need to surpass to signal a bullish reversal.

Conversely, support levels are found at $2278.78, followed by $2227.70 and $2183.01, marking critical thresholds that could lead to further declines if breached.

The 50-day Exponential Moving Average (EMA) at $2342.77 suggests resistance just above the current price, while the 200-day EMA at $2268.84 provides some support below. The current setup suggests a cautious approach, as gold remains bearish below $2333.85, and a sustained move above this level could shift momentum to the upside.

About the Author

Arslan Aliauthor

Arslan is a finance MBA and also holds an MPhil degree in behavioral finance. An expert in financial analysis and investor psychology, Arslan uses his academic background to bring valuable insights about market sentiment and whether instruments are likely to be overbought or oversold.

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