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Fundamentals

During the Asian session on Tuesday (May 30), spot gold fluctuated to the downside and is currently trading around 1935. After months of "ripping off" between the two parties, US President Joe Biden finally reached a debt ceiling agreement on May 28 with House Speaker McCarthy. Coupled with the market starting to bet on a continuation of rates hiking in June-July, gold prices came under pressure and retreated. However, since it will eventually have to be passed in Congress, and many differences are still existing between the two parties, accidents cannot be completely ruled out. It is known to all that it is just a rare event but can stir up waves.

Economic data is less frequent during the session. Traders need to keep an eye on news about the US debt ceiling agreement tonight as well as speeches from Fed officials. The market is now expecting a 60% chance that the Fed will raise rates at its June meeting.

Overall: Over the weekend, U.S. President Joe Biden and House Speaker McCarthy reached an agreement to suspend the government's debt ceiling for two years, but the agreement needs to be approved by the US Congress. The two parties will meet on the afternoon of May 30 local time to discuss specific debt ceiling bills. A smooth passage of the US debt ceiling agreement will conduce to alleviate traders' fears of a US default, and the market's risk appetite will elevate further. However, since differences between the two parties still exist, new variables in the subsequent process of text drafting cannot be ruled out. In addition, the dollar index and US Treasury yields are expected to maintain a rally as the market sees an increase in the likelihood of further Fed rate hikes in June in the near future. This will continue to weigh on gold prices and lead to an extension of a weak oscillation trend in the short term. However, we should also be aware that the reduction in fiscal spending by the US government after the agreement on the debt ceiling may have a greater negative impact on the economy, which is now on the way to recession. Attention should be paid to the intraday support near 1935, which has proven valid for almost a week. Aggressive traders can rely on this position to test long lightly.

The trading reference range today is 1935-1958.

Technical Analysis

Trading at the daily timeframe, the suppression by unilateral moving averages is evident amid consecutive declines, with short-term suppression around 1950, which is yesterday's high. However, even if you look at the downward break, it is still unwise to chase the bears under this weak and volatile trend. Since a small Doji Star appeared yesterday, it is difficult for bears to form a trend in the short term, which is better to wait for the rebound suppression point 1958 before participating. The support below the daily chart is around 1918. At present, MACD has formed a death cross and crossed the zero level downward, with the short-term moving average diverging downward. However, due to the adhesion of the 4-hour moving average, an effective break below 1935 cannot be observed for now. Intraday prices are probably to oscillate within the Bollinger bands, with the upper Bollinger band resistance point reaching 1958 and the lower Bollinger band support point approaching 1935.

During the day, aggressive investors can take long positions around 1935 in the short term with light stocks. The stop loss is set at 1930, and the preliminary target is 1950, at which time can partially take profit. The rest can be converted into the principal guarantee and let the profits run. All left the market if it reached around 1969.

Trading Recommendations

Trading Direction: Long

Entry Price: 1935

Target Price: 1969

Stop Loss: 1918

Support: 1935.000/1910.000

Resistance: 1958.000/1969.000