{x} | Trading.live

Fundamentals

During the Asian session on Monday (May 22nd), spot gold was narrowly oscillating downward and is currently trading around $1975. Besides, gold prices temporarily gained support and rebounded sharply on Friday when Fed Chairman Powell conveyed a dovish signal that interest rate hikes were expected to be suspended plus the progress of the U.S. debt ceiling negotiations was blocked, raising the market's safe-haven appetite, and lowering the yields of USD and U.S. treasury bond. Today, under the influence of the sentiment about the resumption of debt ceiling negotiations, the market went into a wait-and-see, and the gold narrowly oscillated.  

Due to the insufficient data today, the focus will be on the progress of the U.S. debt ceiling negotiations. At 06:00 GMT on Monday, Biden's debt ceiling negotiation team entered the office of U.S. House Speaker McCarthy to reschedule negotiations. The resumption of the U.S. debt ceiling negotiations has weakened safe-haven buying demand, and if optimism about the debt ceiling negotiations heats up further, gold prices could extend last week's decline.

Recently, the U.S. released data generally performed better than expected. For instance, in April, housing started to increase, the monthly rate of industrial output exceeded expectations, and the monthly rate of retail sales re-expanded. Meanwhile, many Fed officials have exhibited their hawkish stands recently, but the impact of the Fed chairman's dovish speech on Friday is still growing, forming short-term support for gold prices. Additionally, the debt ceiling deadline is approaching in the coming week while the negotiations are not smooth, and the Fed minutes as well as key U.S. economic data will be released, the volatility of gold is magnified. For investors, it is recommended to pay close attention to the U.S. employment and inflation data to be released between the end of May to June. Although the technical gold prices tend to plummet further, the fundamentals will bring gold bulls to life, gold prices may widely oscillate with today's trend being bullish oscillations.

The trading range today will be $1950-$2000.

Technical Analysis

Daily chart: gold is currently oscillating near the 5-day SMA which tends to break below the 60-day SMA. At the same time, the 10-day SMA crosses downwards the 20-day SMA and forms a death cross and the death cross signals of MACD continue. Before rushing through the 20-day SMA, gold tends to oscillate downward. In the short term, the focus will be on the support near $1950 as the lower points of April 3rd and last week are close. If this position is lost, further bearish signals will be strengthened. Further targets should be near $1920, the 61.8% Fibonacci retracement ($1910) of the gain between $1804-$2079, and $1900.  

However, gold rebounded at $1950 last Friday after gaining support, with the candlestick chart recording a bullish Engulfing Pattern at the bottom, eliminating the short-term depreciation risks. If gold could further step up the 20-day SMA ($2003), further bullish signals will accumulate. Shortly, there is significant resistance near last Thursday's high ($1986) and last Wednesday's high ($1993)

Trading Recommendations

Trading direction: Long

Entry price: 1970

Target price: 2000

Stop loss: 1940

Support: 1950.000/1920.000

Resistance: 2000.000/2030.000