Gold Weekly Analysis: NATO countries blocks Russia's gold Trans.
Despite strong US bond markets, gold has strengthened somewhat over the past few days. Although the reality is that gold is not supposed to rise if the bond rate increases, then gold is in a very favorable position.
Again, 10-year bonds are technically close to resistance levels. In other words, there is a chance that the uptrend of bonds will come to a standstill next week.
From the present rate of the 10 years bond rates, there is an excellent resistance after 10/15 BP. So, the bond may go into correction after testing its resistance level.
On the other hand, gold is rising again from its trendline support zone and stabilized above the falling trendline. So, if the bond drops from strong resistance precisely as I expected next week, hopefully, gold will rise more in the upcoming week, nearly at $1975.
Last week gold was in the middle of the ups and downs between $1920 and $1965. I mean, gold was in a tight range. Of course, the gold traders do not expect a tight range in this volatile moment. However, despite the Gold Major trend line support break-out, the momentum is still bullish, as can be seen from gold's move.
The Fed was very aggressive last week. Fed Chairman Powell has announced that he wants to raise rates six times this year and 50 BP rate rising still in the card at May and can raise rates on each day of the rate decision. So naturally, raising the Fed rate is a big obstacle for gold rising. But even then, gold's uptrend bias is doing more.
We need to understand that by raising the bank rate in this way, it may be possible to prevent temporary inflation. If inflation temporarily subsides, the gold price may also drop. But in the long run, it will hurt the US economy. And if the economy suffers, the recession is unlikely. Then gold will become more robust than anytime before.
The economic downturn is imminent, and something can be said about the bond's movement. When you see that short-term bond rates are rising faster than long-term bonds, meaning that investors cannot rely on the economy in the long run, then there is a hint of an economic downturn.
On the other hand, another big thing happened last week. The United States and its allies started on Thursday to prohibit the Russian central bank from doing financial transactions involving gold, making it more difficult for Russia to finance the war and circumvent sanctions.
Experts believe that the Central Bank of Russia has more than $ 100 billion worth of gold in its assets, accounting for approximately 20 percent of the bank's total reserve holdings. Following this development, the gold rate rose to $ 1,965, the highest in more than a month.
Next week will see some of the most significant reports on US GDP and NFP. So we must keep an eye on these reports. These reports are substantial for gold. This time the NFP report is expected to be much lower than last time. And honestly, if the NFP report drops, it won't be too difficult for gold to test the $2000 price again.
But before gold breaks above $2000, there is strong resistance to nearly the $1970/1975 price zone. So, at the rate of $1970/1975, we may see some profit-taking and downside correction. So, for the long-term buy, we should wait for a break and stabilize above the $1975.
Technical Analysis
There is another technical chart that might be effective in the next week. Have a look, please.
Immediately resistance is at the $1975 price zone from the present rate. So, most possibly, gold may go through some downside correction from that level. But if gold, however, manages to break above $1975, our upside target is $2000.
On the other hand, there is solid and immediate support is at $1938/1930. So as long as gold is above $1930, it may push higher. But if gold breaks below the $1930, it may drop below the $1900/1890 price zone.
Again, 10-year bonds are technically close to resistance levels. In other words, there is a chance that the uptrend of bonds will come to a standstill next week.
From the present rate of the 10 years bond rates, there is an excellent resistance after 10/15 BP. So, the bond may go into correction after testing its resistance level.
On the other hand, gold is rising again from its trendline support zone and stabilized above the falling trendline. So, if the bond drops from strong resistance precisely as I expected next week, hopefully, gold will rise more in the upcoming week, nearly at $1975.
Last week gold was in the middle of the ups and downs between $1920 and $1965. I mean, gold was in a tight range. Of course, the gold traders do not expect a tight range in this volatile moment. However, despite the Gold Major trend line support break-out, the momentum is still bullish, as can be seen from gold's move.
The Fed was very aggressive last week. Fed Chairman Powell has announced that he wants to raise rates six times this year and 50 BP rate rising still in the card at May and can raise rates on each day of the rate decision. So naturally, raising the Fed rate is a big obstacle for gold rising. But even then, gold's uptrend bias is doing more.
We need to understand that by raising the bank rate in this way, it may be possible to prevent temporary inflation. If inflation temporarily subsides, the gold price may also drop. But in the long run, it will hurt the US economy. And if the economy suffers, the recession is unlikely. Then gold will become more robust than anytime before.
The economic downturn is imminent, and something can be said about the bond's movement. When you see that short-term bond rates are rising faster than long-term bonds, meaning that investors cannot rely on the economy in the long run, then there is a hint of an economic downturn.
On the other hand, another big thing happened last week. The United States and its allies started on Thursday to prohibit the Russian central bank from doing financial transactions involving gold, making it more difficult for Russia to finance the war and circumvent sanctions.
Experts believe that the Central Bank of Russia has more than $ 100 billion worth of gold in its assets, accounting for approximately 20 percent of the bank's total reserve holdings. Following this development, the gold rate rose to $ 1,965, the highest in more than a month.
Next week will see some of the most significant reports on US GDP and NFP. So we must keep an eye on these reports. These reports are substantial for gold. This time the NFP report is expected to be much lower than last time. And honestly, if the NFP report drops, it won't be too difficult for gold to test the $2000 price again.
But before gold breaks above $2000, there is strong resistance to nearly the $1970/1975 price zone. So, at the rate of $1970/1975, we may see some profit-taking and downside correction. So, for the long-term buy, we should wait for a break and stabilize above the $1975.
Technical Analysis
There is another technical chart that might be effective in the next week. Have a look, please.
Immediately resistance is at the $1975 price zone from the present rate. So, most possibly, gold may go through some downside correction from that level. But if gold, however, manages to break above $1975, our upside target is $2000.
On the other hand, there is solid and immediate support is at $1938/1930. So as long as gold is above $1930, it may push higher. But if gold breaks below the $1930, it may drop below the $1900/1890 price zone.
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