Gold struggles as 'higher for longer' entrenches
The Fed's meeting this week gave some support to gold, with Jerome Powell saying that another hike this year is unlikely, although that hadn't been a serious expectation anyway. It remains very likely that the Fed won't now start cutting rates this summer and also quite possible that there won't be three cuts in 2024 and that the expected start of the cuts, now in September, could be delayed further.
No trend can continue endlessly without a consolidation or retacement, but it remains to be seen whether this is one of those or possibly the beginning of a new sideways trend. The 100% weekly Fibonacci extension appears to have been broken, but it's critical to remember that this represents an area, not a specific level, so it wouldn't be particularly surprising to see the price move back up to the line again.
Gold is now close to oversold based on the slow stochastic and approaching the 50-day moving average from Bollinger Bands, so continuation below $2,250 in the immediate future seems unfavourable unless the NFP is much stronger than expected. The 20-day moving average around $2,350 is a possible dynamic resistance.
Trader should be prepared for high volatility around the NFP. Since the result for total nonfarm itself has beaten the consensus consistently for many months, a higher figure seems almost certain, but the key intrigue is how much higher the actual result might be. A lower number, while very unlikely, would probably give gold a boost at least temporarily.
This is my personal opinion which does not represent the opinion of Exness. This is not a recommendation to trade.
No trend can continue endlessly without a consolidation or retacement, but it remains to be seen whether this is one of those or possibly the beginning of a new sideways trend. The 100% weekly Fibonacci extension appears to have been broken, but it's critical to remember that this represents an area, not a specific level, so it wouldn't be particularly surprising to see the price move back up to the line again.
Gold is now close to oversold based on the slow stochastic and approaching the 50-day moving average from Bollinger Bands, so continuation below $2,250 in the immediate future seems unfavourable unless the NFP is much stronger than expected. The 20-day moving average around $2,350 is a possible dynamic resistance.
Trader should be prepared for high volatility around the NFP. Since the result for total nonfarm itself has beaten the consensus consistently for many months, a higher figure seems almost certain, but the key intrigue is how much higher the actual result might be. A lower number, while very unlikely, would probably give gold a boost at least temporarily.
This is my personal opinion which does not represent the opinion of Exness. This is not a recommendation to trade.