🖥 GOLD MARKET ANALYSIS AND COMMENTARY - [April 22 - April 26]

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This week, XAUUSD increased mainly due to escalating tensions between Iran and Israel. Gold prices recorded a fifth consecutive week of gains, the longest winning streak since January 2023. Despite strong gains in the dollar and bond yields, expectations of an interest rate cut in 2024 have faded. decline.

Israel's response comes a week after Iran's drone and missile attacks on Israel pushed gold prices to a record high of over $2,426 an ounce.

Recent statements from Fed officials suggest there is no rush to cut interest rates in the short term. This view is echoed not only by Federal Reserve Chairman Jerome Powell but also by John Williams of the New York Fed and Raphael Bostic of the Atlanta Fed).

According to Kitco, in addition to persistent inflation, it is important to emphasize that the continuously tightening labor market reinforces the view of a strong economy, supporting the "soft landing" scenario, indicating that the The expected first interest rate cut will be delayed. It is worth noting that the market focus has shifted slightly from Fed policy to geopolitical risks, influencing investor strategies and gold pricing.

Israel reportedly struck back at Iran on Friday morning, hitting a military site with drones, but it was limited and did not appear to cause much damage. Gold prices rose nearly 1.6% after concerns about widespread conflict in the Middle East disrupted global markets following the above event. Fed officials agree that interest rate cuts are not urgent. The market currently predicts the probability of an interest rate cut in September is about 67%. High interest rates make holding non-yielding gold less attractive.

Next week is a week of little economic data of note, as traders focus on March U.S. new home sales on Tuesday and March durable goods on Wednesday.
On Thursday, there will be the release of the first quarter US GDP report, quarterly PCE data, weekly initial jobless claims and pending home sales data. The week's most notable data will appear on Thursday.

Analysis of technical prospects for XAUUSD
On the daily chart, gold remains stable with technical conditions supporting an upward price trend as reported to readers throughout recent publications. The short-term uptrend is noticed by the price channel and the medium-term trend is noticed by the EMA21.
The weekly close above the 1% Fibonacci extension opens up the prospect of continued upside next week with a near-term target of $2,400 full price and beyond all-time highs.
Currently, there are no notable resistance points to set expectations for a possible downward adjustment. If gold is sold off below 2,365 USD, it will have conditions to technically adjust downward to the target level. then at the 0.786% Fibonacci extension point.
The trading plan for next week will consider buying if the price falls and adjusting to around 2320, and selling if the price increases to reach 2473.

Looking ahead, gold remains tilted towards the bullish case and notable technical levels are listed below.
Support: 2,382 – 2,365USD
Resistance: 2,400 – 2,417 – 2,431USD

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The USD price rose sharply after US Federal Reserve Chairman Jerome Powell mentioned that the US economy does not yet exhibit signs of inflation reaching the central bank's 2% target. He acknowledged that it might take longer than anticipated to lower interest rates. The Fed Chairman's decision on interest rates, coupled with the search for a safe investment amidst mounting geopolitical tensions following Iran's attack on Israel, further bolstered the strength of the USD.

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ECB officials are focusing on the June 6 policy decision. This is considered when the ECB will start cutting interest rates. Villeroy has been a vocal supporter of such a move, while his more hawkish colleagues have expressed less certainty.

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Easing concerns about widespread conflict in the Middle East have boosted investors' risk appetite, reducing safe-haven demand for gold bars. Besides, the wave of selling to take profits when gold prices rose to a record high is also the reason why gold plummeted today.

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Gold bars are trading near $2,300 per ounce after falling nearly 3% in the first two sessions of the week as easing tensions in the Middle East reduced safe-haven demand.

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Traders now expect only one or two rate cuts this year. This represents a significant disappointment from the six cuts that were expected at the beginning of the year and the three that Fed officials expected in March. While some investors and economists expect that no cuts will be made at all this year.

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Gold prices are still struggling to regain recent upward momentum and are currently trading around a narrow range from $2,311 to 2,330. The reason for this partly comes from the cautious psychology of traders before important US economic data is released.