Gold has experienced significant volatility over the past month due to escalating tensions in the Middle East and fluctuating US economic data. Here's my analysis of the current situation and potential future movements for Gold.
News and Economic Data:
May 30, 2024:
Preliminary GDP q/q: A measure of the annualised change in the inflation-adjusted value of all goods and services produced by the economy. Higher-than-expected GDP growth can strengthen the USD.
Unemployment Claims: The number of individuals who filed for unemployment insurance for the first time. A lower number suggests a stronger labor market, potentially boosting the USD.
Pending Home Sales m/m: Measures the change in the number of homes under contract to be sold but still awaiting the closing transaction. Strong data can support the USD.
FOMC Meeting: Statements and interest rate decisions from the Federal Open Market Committee can significantly impact the USD.
May 31, 2024:
Core PCE Price Index m/m: A major inflation indicator for the USD. Higher-than-expected inflation can lead to increased expectations of interest rate hikes, strengthening the USD.
Tensions in the Middle East:
"Israel expects the Gaza war to last seven more months" - Source: Financial Times (29/05/24)
There is an uncertain risk that the current situation may escalate to a wider Middle East conflict. Therefore, many market participants will seek "safe haven" investments such as Gold as a strategy to hedge against the dollar in preparation for a dooms day event. Based on this, bullish pressure remains on Gold for the foreseeable future. However, we can expect short term retracements based on News and Economic data.
Technical Analysis:
Price is currently in between the range 2325.00 and 2364.00. If we can see price break and stabilise below 2325, this will give us opportunities for short entries down to 2280. Additionally, the DXY is resuming its uptrend by making higher highs and higher lows.
My current trade:
I currently have a short trade running from 2357. I will be adding to my positions after news and economic data is released tomorrow and on Friday. (Assuming that news data is in favour of the US Dollar)
Good luck guys!
News and Economic Data:
May 30, 2024:
Preliminary GDP q/q: A measure of the annualised change in the inflation-adjusted value of all goods and services produced by the economy. Higher-than-expected GDP growth can strengthen the USD.
Unemployment Claims: The number of individuals who filed for unemployment insurance for the first time. A lower number suggests a stronger labor market, potentially boosting the USD.
Pending Home Sales m/m: Measures the change in the number of homes under contract to be sold but still awaiting the closing transaction. Strong data can support the USD.
FOMC Meeting: Statements and interest rate decisions from the Federal Open Market Committee can significantly impact the USD.
May 31, 2024:
Core PCE Price Index m/m: A major inflation indicator for the USD. Higher-than-expected inflation can lead to increased expectations of interest rate hikes, strengthening the USD.
Tensions in the Middle East:
"Israel expects the Gaza war to last seven more months" - Source: Financial Times (29/05/24)
There is an uncertain risk that the current situation may escalate to a wider Middle East conflict. Therefore, many market participants will seek "safe haven" investments such as Gold as a strategy to hedge against the dollar in preparation for a dooms day event. Based on this, bullish pressure remains on Gold for the foreseeable future. However, we can expect short term retracements based on News and Economic data.
Technical Analysis:
Price is currently in between the range 2325.00 and 2364.00. If we can see price break and stabilise below 2325, this will give us opportunities for short entries down to 2280. Additionally, the DXY is resuming its uptrend by making higher highs and higher lows.
My current trade:
I currently have a short trade running from 2357. I will be adding to my positions after news and economic data is released tomorrow and on Friday. (Assuming that news data is in favour of the US Dollar)
Good luck guys!
Note
Prelim GDP and Unemployment Claims are out guys. DXY has had a negative reaction to this. Keep an eye on price action! Incoming rally on US Markets open
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.