“Experts Expectations After Federal Reserve Meeting on Gold: Market Variables and Technical Indicators”

Investing.com – Gold prices did not witness any strong and noticeable movements, either up or down, today, Tuesday, as investors were cautious, awaiting new signals from major central banks regarding their monetary policy plans, especially from…

The Fed, which meets May 2-3, is widely expected to raise .

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Gold and the dollar now

It rose by 0.05% to $1,993.

While it rose by 0.07%, at 1984 dollars an ounce.

It decreased by 0.1%, to score 101.8 points.

Technical indicators

gold when settling yesterday

Gold prices fell at the settlement of transactions, yesterday, Monday, due to the rise of the dollar after the release of economic data that supported the US currency.

Upon settlement, gold futures fell by 0.4%, or the equivalent of $6.90, to reach $1992.2 an ounce.

While spot contracts fell by 0.25% to 1982 dollars an ounce.

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Gold will jump again

Ajay Kedia, director of Kedia Commodities in Mumbai, said gold prices could move towards $2,000 if the Fed highlights recession fears and hints at a pause in the rate hike cycle.

Manufacturing contracted in the US in April, but there was a build-up of inflationary pressures, supporting expectations of a Fed rate hike, according to data released on Monday.

Bullion is known as a hedge against inflation and economic uncertainty, but higher interest tends to reduce demand for zero-yielding assets.

Federal meeting

The US Federal Reserve, the largest central bank in the world, will meet today, Tuesday through tomorrow, Wednesday, to announce interest rates, which have reached the level of 4.75% and 5%.

The meeting of the US Federal Reserve comes amid the collapse of the US banking sector and the sale of the collapsed First Republic Bank to JP Morgan (EGX: AUTO), after a 99% decline in the bank’s shares in the first quarter.

On March 22, 2023, the US Federal Reserve, led by Jerome Powell, raised interest rates to the highest level since 2007 at 5%, according to the bank’s targets, ignoring the crisis of the collapse of US banks led by Silicon Valley.

In the minutes of the previous US Federal Reserve meeting on raising interest rates, the bank acknowledged the existence of severe fears and the strong impact of the Silicon Valley bank collapse last month on the US macro economy, and that the repercussions of the US banking crisis are likely to push the economy towards recession.

Banking crisis

In the previous session, gold prices rose briefly above $2,000 after JPMorgan’s takeover of First Republic assets.

As gold prices turned upward yesterday, affected by the news of the collapse of the “First Republic” bank and the acquisition of all its assets by “JP Morgan (NYSE:)”, as gold is usually active in times of crisis as a safe haven from risks, and thus with the return of the banking crisis to the forefront of New activity returned to the yellow metal, coinciding with the decline in risk appetite, to now jump above $2,000 an ounce.

The California financial regulator acquired First Republic Bank. First Republic Bank (NYSE:), which means the third US bank collapse since March, after a last-ditch effort to convince rival lenders to keep the ailing bank afloat.

Gold is back down

Data issued by the Institute for Supply Management yesterday caused a change in the course of gold, as it turned to losses after it was up by 0.7% before the release of the data.

The data was positive this time, to warn that the economy is recovering and moving away from recession in the coming period, which it does not want, given that this contributes to the rise in inflation, and therefore this data supports the Fed’s tightening in its monetary policy. Where it interacted with the issuance of the data and now fell below levels of $2000 an ounce, while breaking its stability and turning to gains during these moments of today’s trading.

(ISM) recorded yesterday for the month of April 47.1 points, while expectations were indicating that it would score 46.8 points, and the previous reading was at 46.3 points.