Gold Price maintains its low level as it moves towards the lows of the short-term key trading range. Rising US Treasury yields and the US dollar are limiting demand for gold in risky markets. While the developments were in this direction, important statements came from Credit Suisse. Let’s take a look at the explanations.
Is there a fix at the door for gold?
cryptocoin.com As we have mentioned above, the ongoing debate on the debt limit in the United States is putting pressure on the gold price. The Americans, who are negotiating the issue, are preparing for the weekend. Our focus is on US data and risk catalysts to set direction.
It is precisely in this risky environment that Credit Suisse strategists announced their expectations for the price of gold. According to them, gold saw its highest level in recent years with $2,063 and $2,075. After this level, it is under increasing pressure. Analysts emphasize the following at this point:
“Gold is moving in line with the exhausting short-term momentum chart we highlighted last month. It has started to retrace more decisively from the key resistance at record highs of $2,063/2075 recorded in 2020 and 2022. The triple bearish momentum divergence still continues. The next supports are at $1,949/1940. Below this level, there will be a correction to $1,892. We will wait for these levels.”
Analysts also shared their expectations after the current correction phase. The expectations are as follows:
“After the current correction phase, we believe the market will reach new record levels by the end of the year, supported by lower US Real Rates. With that in mind, gold will rise above $2,075 on a weekly close basis. After this stage, a correct move will begin, which is our first basic upward target of 2.330/2.360.”
The risk situation is decisive
Bulls and bears are in fierce competition as Gold Price enters today’s European session. The two sides are struggling to find a clear direction around the short-term support line near $1,955. In doing so, the yellow metal reflects market indecision amid mixed signals about the US debt limit extension and the US Federal Reserve.
The failure of US policymakers to reach an agreement to increase the debt limit increases fears of US default. However, organizations such as Fitch and Moody’s have been cautious about the US credit rating. That’s why the US Treasury Department acknowledges their fears.
On the other hand, the minutes of the last meeting of the Federal Open Market Committee (FOMC) showed that policy makers were divided on the recent 0.25% rate hike by the US central bank. The same situation casts doubt on the bets that the market will make another such move in June. Still, Atlanta Fed President Raphael Bostic explains, “We’re just at the beginning of the hard part of reining in inflation.” Similarly, Federal Reserve Chairman Christopher Waller opposes a barrier to rate hikes. Waller says he does not support stopping interest rates unless there is clear evidence that inflation is moving towards the 2% target.
On the other hand, the market expects more easing from China. Also amid record high interbank Repo turnover, Gold contrasts with geopolitical fears that will push price movements. That reflects the mood, with S&P500 Futures jumping from two-week lows. It ended the two-day downtrend and reached 4.138, up 0.39% on the intraday. On the other hand, yields on US 10-year and two-year Treasury bonds continue to rise from their highest levels since mid-March. At the time of writing, it is around 3.75% and 4.40%.
Gold price technical analysis
Gold price is in the short-term trading range of $1,985 to $1,951 since May 16. This supports the one-week ascending support line surrounding $1,955.
However, the upcoming bullish cross on MACD and conditions below 50 of the RSI (14) line support gold buyers. However, the two-week falling trendline and the 200 Hourly Moving Average (HMA) are located around $1,977 and $1,981 respectively. This level prevents the sudden upward movements of gold. So the curious wait for the next moves continues.
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