Chapter 29 XAUUSD: Gold Rebounds Slightly as Risk-Aversion Heats Up（5.08）
Fundamentals
During Monday's (May 8th) Asian session, spot gold rose slightly and is currently trading at 1922 with oscillations. Besides, as the Nonfarm Payrolls released on Friday were better than expectations, gold prices pulled back sharply, and finally stayed above 2000. On the one hand, the inflow of buying-the-dips supports gold prices, on the other hand, the market concerns about the US banking and debt crisis also provide safe-haven support to gold.
US Treasury Secretary Yellen issued a stern warning on Sunday that if Congress fails to act on the debt ceiling, it could trigger a "constitutional crisis" that would also call into question the federal government's credit.
US Nonfarm Payrolls was 253,000 after quarterly adjustment in April, higher than the expected value of 180,000 and the previous value of 165,000. Meanwhile, the US unemployment rate was 3.4% in April, lower than the expected value of 3.6% and the previous value of 3.5%.
In general: the U.S. data is clearly preferable, which generates short-term bullish support on the USD, and bearish impact on gold. However, the long-term gold factors have not changed, which on the one hand, the Nonfarm Payrolls will only temporarily change the expectations of interest rate hikes without changing the ending of interest rate hikes. On the other hand, the US banking risk is still accumulating, with data demonstrating that the deposits in various banks in the US are flowing out. Lastly, the US debt problem is in danger. If a default occurs, the impact on the economy will be catastrophic, even if there is no debt problem, the probability of a recession in the US during the year is also tremendous. For gold, going long at lows is still the main trading logic.
The trading range today will be 2015-2035.
Technical Analysis
Daily chart: MACD's golden cross was broken, suggesting a bearish divergence signal. Moreover, KDJ formed a death cross, while gold formed a 'long-upper-lower candle' pattern at the historical highs. Furthermore, a double-tops pattern emerged in the daily chart, and gold may retrace with oscillations shortly. The initial support is near the 20-day SMA (2005) and the lower support on last Friday was near 2000. If the support is lost, short-term descending risks will be added. Further support will be near 1978, which was the low of last Tuesday, while the lower support on April 19th was near 1969. If gold plummets below further, further bearish signals will be increased in the middle term, and the strong support below will be close to 1924.
As gold is supported by the 20-day SMA, with buying-the-dips near 2000, there are still chances for bulls. The initial resistance will be near the 5-day SMA (2029) and strong resistance near 2048. If the position is recovered, further bullish signals will be strengthened, and gold may surge above the previous high (2080).
Trading Recommendations
Trading direction: Long
Entry price: 2015
Target price: 2048
Stop loss: 1990
Support: 2005.000/1969.000
Resistance: 2035.000/2048.000
