GBP/USD needs to clear 1.2660 to extend its bullish rally

GBP/USD has lost its traction but managed to hold above the 1.26 level. The pair needs to clear 1.2660 to remain bullish.

Cable needs to flip 1.2660 into support to attract buyers

“The Conference Board's Consumer Confidence Index for May and the Housing Price Index data for March will be featured in the US economic docket. In case investors are reminded of the negative impact of inflation on consumer confidence, Wall Street's main indexes could come under bearish pressure and make it difficult for GBP/USD to gather bullish momentum.”

“In case cable breaks below 1.26 (psychological level, static level), the next immediate support aligns at 1.2570 (200-period SMA, 50-period SMA). If that latter support fails, this could be seen as a significant bearish development and open the door for additional losses toward 1.2540 (former resistance, static level).”

“The pair needs to settle above 1.2630 (ascending trend line) and clear 1.2660 (static level) to test 1.27 (static level, psychological level).”

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Gold PriceGold Price Forecast: Battle lines well-defined for XAUUSD amid light trading 

Gold Price is supported above $1,850 amid holiday-thinned trading.

US dollar remains on the defensive amid a risk-on market mood.

XAUUSD is struggling amid a bunch of healthy resistance and support levels.

Gold Price is giving a part of its early gains but appears supported amid holiday-thinned market conditions. The US dollar is seeing a dip-buying demand, despite the risk-on trading on global stocks. Investors continue assessing the China covid easing optimism and subsiding aggressive Fed’s tightening bets against signs of slowing in the US economy. Therefore, gold price is seen fluctuating between gains and losses while defending the $1,850 barrier. The EU Summit on Ukraine crisis is closely followed, as Russia’s oil embargo is likely to be part of EU sanctions package. These developments could affect the broader market sentiment, significantly impacting the dollar and XAUUSD price.

WANT TO DIRECT TALK OUR MARKET EXPERT CONTACT MONEY LIFE RESEARCH Forecast: Battle lines well-defined for XAUUSD amid light trading 

Gold Price is supported above $1,850 amid holiday-thinned trading.

US dollar remains on the defensive amid a risk-on market mood.

XAUUSD is struggling amid a bunch of healthy resistance and support levels.

Gold Price is giving a part of its early gains but appears supported amid holiday-thinned market conditions. The US dollar is seeing a dip-buying demand, despite the risk-on trading on global stocks. Investors continue assessing the China covid easing optimism and subsiding aggressive Fed’s tightening bets against signs of slowing in the US economy. Therefore, gold price is seen fluctuating between gains and losses while defending the $1,850 barrier. The EU Summit on Ukraine crisis is closely followed, as Russia’s oil embargo is likely to be part of EU sanctions package. These developments could affect the broader market sentiment, significantly impacting the dollar and XAUUSD price.

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Dow Futures Up 55 Pts; Core PCE Data in Focus

U.S. stocks are seen opening slightly higher Friday, rallying into the long weekend, helped by a reassessment of the Federal Reserve’s tightening bias as well as some strong retail sector earnings.

At 7 AM ET (1100 GMT), the Dow Futures contract was up 55 points, or 0.2%, S&P 500 Futures traded 14 points, or 0.3%, higher and Nasdaq 100 Futures climbed 70 points, or 0.6%.

The main equity indices on Wall Street posted strong gains Thursday, with the blue-chip Dow Jones Industrial Average closing over 500 points, or 1.6%, higher, while the broad-based S&P 500 gaining 2% and the tech-heavy Nasdaq Composite rising 2.7%.

These averages are on track to snap long losing streaks ahead of the Memorial Day holiday, with the Dow and S&P 500 both over 4% higher for the week and the Nasdaq Composite up 3.4% on the week.

Helping the better tone this week has been the take-away from the minutes of the last Federal Reserve meeting, which indicated that the central bank could slow down its tightening if it sees signs inflation is on a downward trend. 

This puts the spotlight on the release of the core personal consumption expenditure index, at 8:30 AM ET (1230 GMT), which is the Fed's preferred measure of inflationary trends. This is expected to fall to 4.9% on an annualized basis in April, from 5.2% the previous month.

A batch of strong earnings from the retail sector has also boosted market sentiment this week, with the likes of Macy’s (NYSE:M), Williams-Sonoma (NYSE:WSM), Dollar Tree (NASDAQ:DLTR) and Dollar General (NYSE:DG) all posting healthy gains.

Retail earnings continue Friday, with Big Lots (NYSE:BIG) due to report, but there will also be attention on Ulta Beauty (NASDAQ:ULTA), which reported better-than-expected quarterly results after the close Thursday, and Gap (NYSE:GPS), which slashed its full-year profit guidance. 

Workday (NASDAQ:WDAY) will also be in focus after missing earnings forecasts late on Thursday and giving disappointing guidance.

Oil prices edged lower Friday, consolidating around a two-month high on expected demand growth at the start of the summer driving season in the United States.

Also propping up the market is the continued expectation that the European Commission will eventually obtain the unanimous support of all 27 bloc member states for its proposed new sanctions against Russia, despite Hungary’s opposition to date.

By 7 AM ET, U.S. crude futures traded 0.4% lower at $113.67 a barrel, after gaining 3.4% during the previous session, while the Brent contract traded 0.4% lower at $113.70, after a gain of 2.7% on Thursday.

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Gold Price Forecast: XAUUSD bears eye $1,838 and $1,836 as next downside targets

Gold Price is back in the red, falling for the second straight day.

Less hawkish Fed minutes failed to impress gold bulls but not for long.

XAUUSD inches closer towards critical 200-DMA support ahead of US data.

Gold Price is feeling the pull of gravity after less hawkish FOMC minutes released on Wednesday offered a brief reprieve to XAU bulls. The bright metal is extending the retreat from two-week highs of $1,870, as the US dollar clings onto minor recovery gains amid a cautious risk environment. The precious metal, however, seems to find some comfort from falling Treasury yields, as investors digest the latest Fed minutes, which squashed hopes for a more than 50 bps rate hike in the coming months. Going forward, gold’s fate hinges on the key US GDP, Pending Home Sales and PCE data, as it could impact the central bank’s expectations.

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Comment on Gold on May 24, 2022

 In yesterday's session, precious metal Gold did not correct much, but increased from 1842 to 1865 ($23) then dropped back to 1846, closing the day with a bullish candle around.  threshold 1853. Although the gaining force is not strong and is currently decreasing slightly, but the increasing force is still there and the option to wait to buy will be more feasible in today's session.

 - On the h4 time frame, after meeting the 1865 resistance, it is currently decreasing to 1850. In my opinion, the possibility of Gold falling further to the 1836-1842 price zone.  Here we consider the option to buy.

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Gold Price Analysis: XAU/USD benefits from softening buck, lower US yields, eyes test of 200-DMA

Gold is higher amid risk-off flows, a weaker buck and lower US yields.

XAU/USD is eyeing a test of its 200-DMA around $1,837 once again.

Spot gold (XAU/USD) prices are trading around $1,830 per troy ounce and once again eyeing a test of the 200-Day Moving Average around $1,837, having gained around $15 (or around 0.8%) thus far on the session. Risk-off flows in the global equity space have continued on Thursday after Wall Street’s worst day in nearly two years on Wednesday as investors continue to fret about softening global growth expectations at a time when major central banks (namely the Fed and to a lesser extent the BoE and ECB) appear intent on aggressive monetary tightening.

That is a toxic combination for equities and investors have begun seeking out safety in traditional safe-haven assets such as US bonds, even though US bond valuations have been hit hard in recent months by the hawkish shift in the Fed’s stance. Either way, on Thursday US yields (nominal and real) are lower and this is dampening the appeal of the US dollar as a safe-haven currency, with the likes of the Swiss franc and yen performing better.

The combination of lower yields, which reduces the “opportunity cost” of holding non-yielding gold, and a weaker US dollar, which reduces the price of USD-denominated commodities like XAU/USD for foreign buyers, is having the dual effect of supporting gold on Thursday. But whether these trends will continue, and whether XAU/USD will be able to break above its 200-DMA and out of its recent bearish trend, remains to be seen.

In recent weeks, buying USD dips and selling gold rallies has been a highly profitable strategy. As long as markets continue to believe that the Fed will follow through with as much monetary tightening as it has been promising, gold’s chances of rebounding back to the, say, upper-$1,800s look limited. Looking to the immediate future, a few tier two US data releases on Thursday in the form of the May Philadelphia Manufacturing survey, the weekly initial jobless claims report and April Existing Home Sales probably won’t move markets much. But the data will likely keep focus on the overarching themes of slowing growth, inflation and central bank tightening.

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Gold Down as Investors Continue Digesting Hawkish Powell Remarks

Gold was down on Wednesday morning in Asia, with the dollar continuing its retreat from a 20-year high and countering pressure from stronger Treasury yields. Investors also digested the latest hawkish comments from U.S. Federal Reserve Chairman Jerome Powell.

Gold futures were down 0.59% to $1,808.24 by 12:48 AM ET (4:48 AM GMT). The dollar, which normally moves inversely to gold, edged up on Wednesday but extended its decline into a fourth day. Investors’ increased appetites for riskier bets also took the edge off the safe-haven greenback's appeal.

Powell on Tuesday pledged that the U.S. central bank would hike interest rates as needed to curb sky-high inflation that he said threatened the foundation of the economy. The Fed has hiked its interest rate by three-quarters of a percentage point in 2022 to date and is on track to hike it again in half-percentage-point increments at its next two meetings in June and July 2022.

Philadelphia Fed President Patrick Harker will speak, and a G-7 finance ministers and central bankers meeting will take place, later in the day.

In Asia Pacific, Japan’s GDP contracted 1% year-on-year and 0.2% quarter-on-quarter in the first quarter of 2022, while Australia’s wage price index grew 2.4% year-on-year and 0.7% quarter-on-quarter.

Strong U.S. retail sales and factory data for April gave investor sentiment a boost, with consumers purchasing motor vehicles and frequenting restaurants, showing no signs of a slowdown in demand despite high inflation.

In other precious metals, silver and palladium edged up 0.2%, while platinum inched up 0.1%.

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GBP/USD rallies to near two-week high, eyeing 1.2500 ahead of US data/Fed's Powell

A combination of factors prompted aggressive short-covering around GBP/USD on Tuesday.

The British pound drew support from better-than-expected domestic employment figures.

A turnaround in the risk sentiment undermined the safe-haven USD and remained supportive.

Investors now eye the US Retail Sales for a fresh impetus ahead of Fed Chair Powell’s remarks.

The GBP/USD pair added to its strong intraday gains and shot to a nearly two-week high, around the 1.2480 region during the first half of the European session.

The British pound strengthened across the board on Tuesday after the UK Office for National Statistics reported that the number of people claiming unemployment-related benefits dropped by 56.9K in April. This was well below expectations for a fall by 38.8 and the 46.9K decline reported in the previous month. Adding to this, the ILO Unemployment Rate in the UK edged lower to 3.7% in three months to March from 3.8% prior.

Apart from this, the ongoing US dollar profit-taking slide from a two-decade high assisted the GBP/USD pair to build on its recent bounce from the 1.2155 region, or the lowest level since September 2020. Spot prices gained traction for the third successive day, taking along some short-term trading stops placed around the 1.2400 round-figure mark. The subsequent strength might have already set the stage for additional near-term gains.

That said, the UK-EU impasse over the Northern Ireland protocol could act as a headwind for sterling. UK Foreign Secretary Liz Truss will set out how the government plans to change the rules on goods moving between Britain and Northern Ireland and how it could override parts of the Brexit deal. Apart from this, the Bank of England's warning that the UK economy will slide into recession this year might cap gains for the GBP/USD pair.

Traders might also be reluctant to place aggressive bets and prefer to wait on the sidelines ahead of the key US macro data and Fed Chair Jerome Powell's appearance later this Tuesday. The US economic docket highlights the release of monthly Retail Sales figures. Meanwhile, Powell's remarks will be scrutinized for clues about the possibility of a 75 bps rate hike in June, which will influence the USD and provide a fresh impetus to the GBP/USD pair.

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Gold Price Forecast: XAUUSD slides further below $1,800, lowest since late January

Gold attracted fresh selling on Monday and dived to its lowest level since late January.

Signs of stability in the financial markets undermined demand for the safe-haven metal.

Break below the $1,800 accelerated the slide and has paved the way for further losses.

Gold weakened further below the $1,800 mark and dropped to its lowest level since late January during the first half of the European session. Spot prices

Following an early uptick to the $1,818 region, the XAUUSD came under some renewed selling pressure on Monday and prolonged its recent bearish trajectory witnessed over the past one month or so. Modest recovery in the global risk sentiment - as depicted by signs of stability in the equity markets - turned out to be a key factor that undermined the safe-haven gold.

Apart from this, the prospects for a more aggressive policy tightening by the Fed further contributed to driving flows away from the non-yielding yellow metal. The intraday downfall took along some short-term trading stops placed near the $1,800 mark. This further aggravated the bearish pressure surrounding gold, though a combination of factors helped limit losses.

Mounting global growth concern resulting from the war in Ukraine and China's zero-COVID-19 policy has spurred a rally in bonds, which saw the benchmark 10-year yields retreat from the recent peak of 3.20%. This, in turn, kept the US dollar bulls on the defensive and extended some support to the dollar-denominated commodity, allowing spot prices to rebound from the $1,787-$1,785 area.

That said, the lack of any strong follow-through buying and acceptance below the $1,800 round figure marks a bearish breakdown. Hence, a subsequent slide towards the $1,782-$1,780 area, or the 2022 low, en-route the next relevant support near the $1,753-$1,751 zone, remains a distinct possibility. Traders now look forward to the US Empire State Manufacturing Index for a fresh impetus.

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Gold Price Analysis: XAU/USD slides to $1810s, eyes annual lows after fourth successive weekly decline

Gold prices continue to trade with a negative bias in the upper $1810s as the buck remains resilient.

XAU/USD looks on course to post its fourth successive weekly decline and worst weekly performance since June 2021.

With the 200DMA broken, technicians are eyeing support in the form of annual lows around $1780 as the next target.

Spot gold (XAU/USD) prices continue to trade with a negative bias on the final trading day of the week, having hit their lowest levels in more than three months just above $1810 earlier in the session. At current levels in the upper $1810s per troy ounce, gold is trading about 0.2% lower and looks on course to post a weekly loss of around 3.5%, which would mark a fourth successive week in the red and gold’s worst weekly performance since June 2021.

The main driver of gold weakness this week has been the strength of the US dollar, with the Dollar Index (DXY) looking on course to close out the week close to multi-decade highs in the upper 104.00s. A stronger US dollar makes USD-denominated commodities like XAU/USD more expensive for international buyers.

The buck’s resilience on Friday comes despite a rebound in risk appetite which has seen stocks and crypto rally, arguably burnishing gold’s safe-haven appeal. Price action in US bond markets has also been unfavourable for the precious metal this week. While nominal yields (though higher on Friday) look set to end the week substantially lower, real yields are little changed.

That means lower inflation expectations (to be exact, 10-year breakevens have fallen over 20 bps this week to under 2.70%, their lowest since early March), implying a reduced demand for inflation protection. This hurts gold, given the asset is often seen as a hedge against inflation.

Fed chair Jerome Powell’s remarks on Thursday didn’t seem to rock the boat much. He reiterated that he sees 50 bps rate hikes at upcoming meetings as appropriate. Looking ahead on Friday, gold traders will be watching the release of the US University of Michigan Consumer Sentiment survey for May at 1500BST for insights as to how US consumers are holding up in the face of still sky-high inflation.

Any fresh commentary from Fed speakers that might move the needle regarding tightening expectations would also be worth noting. With XAU/USD having broken below its 200-Day Moving Average on Thursday, many technicians predict further downside towards annual lows in the $1780 area.

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USD/CHF slides further below 0.9900 mark amid weaker USD, focus remains on US CPI

USD/CHF corrected sharply on Wednesday and snapped a four-day winning streak.

Retreating US bond yields prompted some USD profit-taking and exerted pressure.

The risk-on mood might undermine the safe-haven CHF and limit any further losses.

The focus remains glued to the release of the latest US consumer inflation figures.

The USD/CHF pair added to its intraday losses and dropped to a fresh daily low, around the 0.9870 area during the first half of the European session.

The pair witnessed heavy selling on Wednesday and snapped a four-day winning streak to its highest level since May 2019, around the 0.9975 touched the previous day. The ongoing retracement slide in the US Treasury bond yields forced traders to lighten their US dollar bullish bets. This, in turn, was seen as a key factor that exerted downward pressure on the USD/CHF pair.

The downside, however, seems limited amid a generally positive tone around the equity markets, which tends to undermine the safe-haven Swiss franc. Apart from this, the prospects for a more aggressive policy tightening by the Fed should help limit the downside for the buck and lend support to the USD/CHF pair, warranting caution before placing fresh bearish bets.

The Fed is widely expected to tighten its monetary policy at a faster pace to combat stubbornly high inflation. In fact, the markets are pricing in a 200 bps rate hike for the rest of 2022 amid concerns that China's zero-covid policy and the war in Ukraine would result in tight global supply chains. This could push already elevated consumer prices even higher.

Hence, the focus will remain glued to the US CPI report, due for release later during the early North American session. The data could influence the Fed's tightening path, which, in turn, would influence the near-term USD price dynamics. Hence, it will be prudent to wait for strong follow-through selling before confirming that the USD/CHF pair has topped out.

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Gold Price Forecast: XAU/USD extends losses towards $1,850 as USD rises with yields

Gold Price gets hammered amid ‘sell everything’ mode amid risk-aversion.

Flight to safety, US dollar dominate while Treasury yields keep rallying.

XAU/USD remains poised to test the $1,850 barrier, awaits US inflation.

Gold Price is tumbling alongside the US government bonds and global stocks, as investors seek refuge in only the US dollar, with risk-aversion at full steam at the start of the fresh week.

After a turbulent last week, dominated by the central banks, global growth fears are back to the fore amid extended Chinese covid curbs and fears over interest rate hikes. In times of market panic and uncertainty, the dollar remains in cruise control, courtesy of its appeal as an ultimate safe haven.

The buck also finds demand as the Fed remains ahead of the curve when compared to all the other major central banks worldwide. Despite a less hawkish stance last Wednesday, the Fed remains on track for 50 bps rate hikes at the next two meetings while beginning the balance sheet reduction process.

A stronger dollar weighs heavily on the USD-price Gold while the rally in the Treasury yields exacerbates the pain in the non-yielding yellow metal. The benchmark 10-year US rates are currently trading at 3.185%, the highest level since November 2018, on Fed rate hike bets.

Adding to the downside in Gold Price, the speculative net shorts on the metal have grown last week, as investors flock to the dollar instead ahead of the all-important US inflation data due later this Thursday.

Looking ahead, Gold Price will remain at mercy of the sentiment around the yields and the dollar. Any rebound in Wall Street stocks could pause the dollar upsurge, offering some reprieve to gold bulls.

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Dollar near 20-year highs amid global markets rout

The dollar index hovered near 20-year highs against major peers on Friday, as market sell-offs in the face of global recession fears propped up the safe haven currency.

European stocks opened lower and were heading for their worst week in two months, following a rout on Wall Street.

The U.S. currency has stood tall on expectations the Federal Reserve will tighten monetary policy faster than peers to stem runaway inflation.

A closely-watched U.S. jobs report due later on Friday could strengthen the case for aggressive tightening, analysts said.

Economists predict a solid 391,000 U.S. jobs were added last month, according to a Reuters poll.

The dollar index, which tracks its performance against a basket of six major rivals, gained as much as 0.5% in early European trading hours to hit a fresh 20-year high of 104.07.

But it later lost ground in choppy trade, and was last broadly flat at 103.55. It appeared touch and go whether the index would record a fifth straight week of gains, up 0.3% on the week.

The Fed raised rates by half a percentage point on Wednesday - the biggest jump in 22 years - but the dollar temporarily cooled on Fed Chair Jerome Powell comments that policymakers were not actively considering 75 basis point hikes in future.

"Financial market conditions will have to get tighter in order to alter central bank thinking on inflation risks and hence the US dollar is set to remain on a strengthening path for now," currency analysts at MUFG said in a note.

The euro lost as much as 0.5% against the dollar in early European trading hours, before reversing course. It was last up 0.2% at $1.05555.

Sterling was broadly flat after earlier dropping below $1.23 for the first time in nearly two years, a day after the Bank of England sent a stark warning that Britain risks a double-whammy of a recession and inflation above 10%.

The BoE also joined the Fed in raising rates, hiking them by a quarter of a percentage point to 1%.

The yen fell back slightly against the dollar, down 0.2% to 130.46 yen per dollar.

In cryptocurrencies, bitcoin weakened slightly to trade just above $36,000.

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XAU/USD at weekly high, bulls awaiting sustained move beyond $1,900

Gold gained traction for the third straight day and climbed to a fresh weekly high on Thursday.

A less hawkish Fed extended support to the metal amid the latest COVID-19 outbreak in China.

The prospects for a further tightening by the Fed revived the USD demand and capped gains.

Gold built on this week's goodish rebound from the $1,850 area, scaling higher for the third successive day on Thursday. The momentum pushed spot prices to a fresh weekly high during the early European session, though bulls struggled to capitalize on the move further beyond the $1,900 round-figure mark.

On Wednesday the Fed increased the Fed Funds rate by 50 bps in the the largest rate hike since 2000, and the beginning of quantitative tightening (QT) – but it downplayed the possibility of further super-size hikes. In the post-meeting press conference, Powell eased market fears about a more aggressive tightening path and said that the Fed was not actively considering a 75 bps rate hike in June. This, in turn, was seen as a key factor that offered some support to the non-yielding yellow metal. Apart from this, concerns about the potential economic fallout from rising COVID-19 cases and strict lockdowns in China benefitted the safe-haven gold.

That said, the markets are still pricing in a further 200 bps rate hike for the rest of 2022, which was evident from a fresh leg up in the US Treasury bond yields. This, in turn, helped revive the US dollar demand and acted as a headwind for the dollar-denominated commodity. This makes it prudent to wait for strong follow-through buying before confirming that gold has bottomed out near the $1,850 region and is positioning for a more robust near-term appreciating move.

Market participants now look forward to the US economic docket, featuring the release of Weekly Initial Jobless Claims later during the early North American session. This, along with the US bond yields, will influence the USD price dynamics and provide some impetus to gold. Traders will further take cues from the broader market risk sentiment to grab some short-term opportunities. 

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