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Fundamentals

During Wednesday's (May 10th) Asian session, spot gold shocked slightly down, and it is currently trading near 1929. Last night, the Fed "No. 3", New York Fed President Williams said, "Inflation is still high, judging the end of interest rate hikes is still too early, and there is no reason to cut interest rates this year". It provides support to the USD and sets the gold bulls under pressure.  

Considering that the U.S. CPI data for April will be out tonight, the market expected the core CPI to rise 5.5% YoY (previously 5.6%). This is still well above the Fed's 2% target, and CPI is expected to rise 0.5% YoY (previously 0.1%).

In general, several European and American central bank vote members spoke yesterday, with U.S. officials reiterating that they will not cut interest rates this year, while European officials expect to continue raising rates after July. Overall, the U.S. and European central bank officials remain hawkish, and the market is waiting for tonight's U.S. CPI data as a new trading lead, as well as the results of the U.S. debt ceiling negotiations. At present, the two parties are still fighting over the debt ceiling without attention to the banking crisis. Moreover, the loss of deposits continues, and the situation is losing control, investors should be highly alert to the recent crisis that may evolve to the next worse stage. Maintain the view that gold remains bullish in the medium to long term, and bulls should not easily liquidate in the long run.  

The trading range of today is 2020-2048.

Technical Analysis

Daily chart: MACD maintains bearish divergence and is currently sticking. In addition, gold prices rebounded mildly after forming a 'long-upper-lower candle' pattern at the historical highs. However, gold failed to destroy the short-term topping signal, indicating the further possibility to build a top under oscillations. Furthermore, the initial support is near the 20-day SMA (2008), if the support is lost, short-term bearish signals will be strengthened. Further support is near 2000, and last Friday's low support is also near. If the support is lost, gold may further plunge to 1969.

Nonetheless, gold is resistant to depreciation. The oscillation center is lifted, suggesting that gold may keep appreciating under oscillations. Try to focus on the resistance above near 2048. If gold breaks through it, ascending momentum will be magnified. It means that gold may start to surge again, with further resistance will be pushed up to the previous high (2080).

Trading Recommendations

Trading direction: Long

Entry price: 2020

Target price: 2048

Stop loss: 1990

Support: 2008.000/1969.000

Resistance: 2048.000/2080.000