Gold price pulled back from the zone of record highs, which was tested for the third time in post-Fed acceleration, sparked by fresh safe haven demand following the central bank’s dovish steer in rate outlook and growing economic risks.
Gold price remains steady and well above $2000 level, with current easing so far seen as consolidation ahead of firm break of recent record high, which will signal an end of a multi-month range trading ($2074/$1614) and continuation of a larger uptrend.
A number of factors contribute to the bullish outlook for the metal, with primary drivers being Fed’s signals of pause in its policy tightening cycle, growing uncertainty about the US economic growth, hurt by high borrowing costs, increased stress in banking sector and concerns about US debt ceiling.
Markets await release of US labor report for April on Friday (180K f/c vs 236K in March) for further signals, with release at/below consensus to add to signals that growth in hiring remains in a downward trajectory (excluding spikes in July 2022 and Jan 2023) that would add to uncertainty and offer more support to the yellow metal.
Strong headwinds from the $2070/80 zone of record highs were expected, as the action has already pulled back twice after a failure in this area and daily studies are overbought, with limited consolidation to remain above strong support at $2000 zone (psychological, reinforced by converged 10/20DMA’s) to keep bulls intact.
Res: 2048; 2070; 2074; 2080.
Sup: 2030; 2015; 2000; 1978.
