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Gold prices plummet sharply and retrace last week’s gains, down more than 2.50% as the Middle East’s woes abate. The pullback in the price of gold metal could be attributed to profit-taking, as mentioned by Jim Wyckoff of Kitco News, alongside some modest strength in the US Dollar.XAU/USD trades at $2,329 after hitting a daily high of $2,392, sponsored by last Friday’s increasing tensions between Israel and Iran. Also, market participants are beginning to price out that the Federal Reserve (Fed) would cut rates later than expected, further weighing on Gold prices.Tehran downplayed Israel’s retaliation drone strike on April 19 in what was perceived as an escalation of the conflict.Elsewhere, Federal Reserve officials struck hawkish remarks led by Chairman Jerome Powell, who commented that the lack of progress on the disinflation process warrants keeping interest rates higher for longer. Echoing his comments was Chicago Fed, Austan Goolsbee, one of the most dovish members of the FOMC, who said that progress on inflation has “stalled.”
Daily Digest Market Movers: Gold retreats as US manufacturing activity accelerates
Technical Analysis: Gold plunges as sellers eye $2,300
Gold price nosedived and formed a ‘bearish engulfing’ chart pattern, which opened the door for a retracement. If XAU/USD prices dip below the April 15 daily low of $2,324, that would pave the way to test $2,300. A breach of the latter will expose the March 21 high at $2,222.On the other hand, XAU/USD’s first resistance would be $2,400, followed by Friday’s high of $2,417. A breach of the latter will expose the all-time high of $2,431.More By This Author:GBP/JPY Price Analysis: Slumped Below 192.00 Amid Risk-Off MoodUSD/JPY Price Analysis: Consolidated Around 154.60 On Japanese Intervention FearsAUD/USD Pressured As Fed Officials Hold Firm On Rate Policy
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