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Fundamentals

During Friday's (April 28th) Asian session, spot gold narrowly oscillated downward, currently oscillating near 1983. Meanwhile, yesterday evening the United States released mixed data, although GDP growth slowed sharply, the price index sub-items and the core PCE exceeded expectations. Moreover, coupled with a decline in initial jobless claims, the market raised the expectation of the Fed rate hike. So, the overall market is neutral, with the USDX rising first and then falling, gold prices corresponded to first down and then back up without major competition between bulls and bears but narrowly oscillated.

Concerns about the May 2nd-3rd interest rate hike and the U.S. debt ceiling issue. From this Tuesday, US tax income has accelerated suddenly, which reduces the possibility of the U.S. Treasury facing the risk of federal payment default as early as June. Now, both Parties in the US didn't show any signs of compromise regarding raising the debt ceiling, but in the past, it was the last day before the two parties reached an agreement, during which U.S. bond yields tend to move downward, which will support gold prices.

In general: US real GDP in the first quarter was a preliminary 1.1% annualized QoQ. It was not only a sharp slowdown from the previous value of 2.6%, for the second consecutive quarterly slowdown, but also well below expectations of 1.9%. The PCE price index, an inflation indicator of great concern to the Fed, rebounded unexpectedly, and the core PCE has been above market expectations for the fifth consecutive time. Besides, the current expectation of a U.S. recession is strengthened, but the inflation resilience is strong, and the Fed rate meeting will be held on May 2nd-3rd, while the market is fully expecting that the Fed will raise the interest rate by 25 bps in May. Thus, focusing on Powell's post-meeting speech to judge the Fed's next monetary policy stance from it. In the short term, bearish and bullish factors are balanced, and gold prices are expected to remain oscillating. Considering the meeting is during the Chinese holiday, traders need to make good position arrangements.

Today, the trading reference range will be 1969-2015.

Technical Analysis

Daily chart: gold prices have narrowly oscillated in 1969-2015 for 10 consecutive trading days, indicating the lack of funds speculation for gold bulls and bears. Furthermore, the death cross bearish indicator from the MACD is good, and gold may test the support near 1969 soon. If gold loses the support, further bearish signals will be added. Then, refer to 1960 for support, with significant support staying near 1955, which is the 38.2% Fibonacci retracement regarding the gain from 1805 to 2048. Then, consider the support of the low on March 27th around 1944. However, the highs of the current rally are decreasing and today's highs have fallen below 2000. Since gold prices are now at absolute highs, the short-term downside risk will be increased.

As KDJ tends to form a golden cross, gold prices are staying above 1980 currently. If gold rebounds above 2000 surprisingly, short-term bearish signals will be weakened. In addition, further resistance will be near 2015, which is the high of recent oscillations. Then, strong resistance will be near 2032.  

Trading Recommendations

Trading direction: Long

Entry price: 1966

Target price: 2000

Stop loss: 1943

Support: 1969.000/1955.000

Resistance: 2015.000/2032.000