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MENAFN- Daily Forex)
- At the beginning of this week, which we highlighted as being of particular importance, gold prices declined amid profit-taking after spot prices tested the resistance level of $2786 per ounce at the end of last week, approaching the all-time high of $2790 per ounce reached in October 2024.
- Meanwhile, profit-taking sales pushed gold prices towards the support level of $2730 per ounce.
- With this performance, our recommendations for trading gold by selling from the top of $2768 succeeded and we came out with gains of +300 points.
Reasons for the recent decline in gold prices:
According to gold trading company platforms, the gold price index has declined relatively from its highest level in over two months, with investors preferring fixed income and defensive stocks over gold bullion after recalibrating future returns for heavy US technology production. However, expectations of a US interest rate cut by the Federal Reserve this year have limited the decline.
This week, the US central bank is expected to keep interest rates unchanged. Moreover, investors are hoping that US Federal Reserve Chairman Jerome Powell will refrain from providing too hawkish guidance after the latest US CPI data pointed to some moderation in core inflation. Also, Pro-inflation risks from US trade policy have eased as US President Trump has softened his rhetoric on tariffs against China and held off on imposing taxes on Colombian exports after the White House approved an expatriate deal with Bogota.
Overall, markets are expecting the US Federal Reserve to deliver two rate cuts this year, with a narrow consensus for the first move in May, in favour of non-interest-bearing asset expectations.
Top Forex Brokers1 Get Started 74% of retail CFD accounts lose money Trading Tips:
The gold path is still rising and with the increasing uncertainty, investors' demand for buying gold will continue, so be careful and do not take risks stocks are under selling pressure
According to stock trading company platforms, US stock indices have come under selling pressure amid threats from Chinese artificial intelligence, which could negatively impact the US artificial intelligence sector that has often provided strong momentum for US stock markets.
According to trading data, the S&P 500 index fell by 1.7% and the Nasdaq 100 index fell by 3.2%. The closely watched semiconductor index fell by 9.5% - the largest since March 2020. Furthermore, most notable in the selling was the 17% decline in shares of Nvidia Corp in the largest market value loss for a single stock in market history.
With the big tech being crushed, US stocks were on track for their worst day since the last US Federal Reserve decision that upset trading.
According to the trades, the intensity of the selling operations in US assets was proportional to the weights of companies that rely on artificial intelligence in the largest stock indexes. Even after the recent reduction to reduce their influence, the Nvidia Group, Apple Inc., Microsoft Corp., Amazon Inc., Meta Platforms Inc., and Alphabet Inc. represent about 40% of the Nasdaq 100 Index. They represent about 30% of the S&P 500 Index, making both measures highly vulnerable to combined declines in those names.
EURUSD Chart by TradingViewGold Price Technical Analysis and Expectations Today:
According to recent trading on the daily chart and gold analyst forecasts, the overall trend of gold prices is still upward, and some profit-taking is natural after gold's recent gains near its all-time high. This, in turn, has moved some technical indicators towards strong overbought levels. Bulls still have the strongest control over the direction of gold. Moreover, we expect gold investors to look for buying opportunities again. Currently, the closest support levels for gold prices are $2726, $2710, and $2678 per ounce, respectively. On the other hand, and over the same time period, the psychological resistance of $2800 per ounce will remain an important target for expecting gold prices to move to new historical highs, with the closest target being $3000.
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