- For the second day in a row, the gold price has recovered from the losses following the announcement of stronger-than-expected US jobs figures, which confirm the strength and resilience of the US economy despite the strong and sharp tightening of the US Federal Reserve's policy.
- Technically, the gold rebound gains reached $2,039 per ounce before stabilizing around $2,033 per ounce at the time of writing the analysis.
- At the end of last week's trading, the gold price fell to the support level of $2,015 per ounce.
- Moreover, as we mentioned, the gold price is supported by the increasing global geopolitical tensions and the increase in central banks' purchases of the yellow metal as a hedge.
In other news affecting the gold market, the world's largest bond market has rallied as traders prepare for a record $42 billion sale of 10-year Treasury notes after a strong start to the week's increased issuance volumes. Also, YIELDS rose after the sell-off, which pushed two-year yields to their highest levels since the US Federal Reserve's "pivot" in December. A $54 billion sale of three-year notes drew strong demand, boosting sentiment and causing traders to ignore a series of cautious statements from Federal Reserve speakers. The S&P 500 index also rose. Moreover, Megacaps stocks were mixed, with Tesla Inc. and Nvidia Corp. stocks rising. US-listed Chinese stocks rose on bets that China will be more forceful in supporting markets.
As expected, the drumbeat of US central bank officials echoed Jerome Powell's signals that the central bank would not be in a rush to ease policy. For her part, Cleveland Fed President Loretta Mester said that policymakers will likely gain confidence to cut interest rates “later this year” if the economy develops as expected. Her counterpart in Minneapolis, Neel Kashkari, celebrated the significant improvement in inflation, but noted that more progress was needed.
Meanwhile, the bond yields managed to rebound on Tuesday, stocks barely moved. The down days in the S&P 500 are not necessarily extinct, but they have become shallower relative to the positive sessions. Since early January, the gauge has seen an average gain of 0.66 percent in positive sessions, compared to a decline of 0.45 percent in negative sessions. Thus, that pushed the ratio of the two to about 1.5 — the highest skew in favor of the bulls since 1995, according to data compiled by Bloomberg.
Analysts at Citigroup noted that investors' position in US technology stocks is so bullish that any selling could lead to a broader decline. Ultimately, bearish bets in tech-heavy Nasdaq 100 futures were completely erased, leaving investors overwhelmingly anticipating further gains. Volatile markets are expected to pose the biggest daily challenge for the second year in a row, according to a JPMorgan Chase & Co. electronic trading survey. Therefore, access to liquidity is the biggest concern about market structure, before regulatory change and data costs.
Obviously, volatility across asset classes remains relatively limited compared to recent volatility, the concern is that it could rise if the global economy faces another shock. Consequently, markets are pricing in more than a percentage point of US interest rate cuts by the Federal Reserve and the European Central Bank, although the poll still sees inflation as having the biggest impact on markets in 2024. In second place are the US elections – with a flurry of other votes scheduled. All over the world as well, in addition to increasing geopolitical risks.
Gold Price Forecast and Analysis Today:
Despite the recent selling operations, the price of gold is still on an upward path with sound foundations, and an actual reversal of the trend will not occur without moving towards the support levels of 2000 and 1985 dollars per ounce, respectively. Performance is currently neutral, and the bulls’ control will strengthen if prices return to the resistance levels of 2055 and 2070 dollars per ounce, respectively. Today's economic calendar data is ineffective, and therefore the gold market will move based on the price of the US dollar and the extent of investors' appetite for risk or not, in addition to the increasing global geopolitical tensions.
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