XAU/USD outlook: Gold eases further ahead of Fed / NFP

Slobodan Drvenica Windsor Brokers

Gold price came under fresh pressure on Tuesday and lost around 1.5% for the day so far, to crack pivotal $2300 zone (psychological / daily Kijun-sen / Apr 23 spike low).

Traders shift their focus to the key events of the week -Fed policy meeting which ends on Wednesday and release of US non-farm payrolls on Friday.

The US central bank is widely expected to stay on hold again, with expectations for the timing and the size and pace of rate cuts being toned down on recent hotter than expected US inflation numbers.

Markets speculate that US policymakers may shift the time for the first rate cut to Q4 and even to early 2025, which would make safe haven bullion less attractive and increase risk of deeper correction, before bulls regain control.

Overall picture remains bullish as permanent geopolitical instability continues to boost demand along with increased demand for the yellow metal from the central banks.

Gold hit a series of new record highs and is on track for the second consecutive strong monthly gain, however, weakening studies on daily chart (14-d momentum moved in the negative territory/ converged 10/20DMA’s are about to form a bear-cross) while monthly candlestick has long upper shadow, warning that bulls are running out of steam.

Deeper pullback should be anticipated on sustained break of $2300 zone, with next solid support at $2260 (Fibo 38.2% of $1984/$2431 upleg) to ideally contain and mark a healthy correction ahead of fresh acceleration towards $2500 target.

Caution on loss of $2260 level which would risk deeper drop and expose pivots at $2200 zone (50% retracement / 55DMA).

Res: 2326; 2340; 2352; 2388

Sup: 2291; 2260; 2222; 2200

Interested in XAU/USD technicals? Check out the key levels

1. R3 2370.76
2. R2 2353.54
3. R1 2319.64
PP 2302.42
1. S1 2268.52
2. S2 2251.3
3. S3 2217.4

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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