introduction :
We first apologize for our absence and return to you with a series of fundamental and technical analyzes that may help you make your decisions.
Inflation reached levels of 3%, which is very close to the Fed’s targets for inflation at 2%, when inflation data was released two weeks ago, which showed that inflation had reached levels that are very satisfactory for the US Federal Reserve to ease the monetary tightening policy that it started in March 2022 after a year and a half fixation at levels of 0.25%, which are levels close to zero, as it maintained these interest levels to avoid the repercussions of the Corona crisis, but with printing and the monetary easing policy that the Fed pursued led the US economy. And the global trend towards unprecedented inflation in the last twenty years, and the Fed remained insisting that inflation is temporary and accompanies the growth taking place in America until it reached a critical stage to admit that inflation began to harm the American economy, and after the protest marches that filled the American streets, especially with the rise in fuel prices at that time to critical levels, and all these factors forced the US Federal Reserve to accelerate the pace of raising interest rates from 0.25 to levels of 5.25 in 11 rate hikes, and it is expected that the US Federal Reserve will stop at the level of 5.5%. That is, the current hike will often be the last, and this is what made the dollar weak and at its fastest rate of decline in years, where we can say that the markets priced themselves on a recent hike in the US interest rate, and accordingly it happened and the Fed raised the interest rate or installed it. American interest, then we will see a strength in the dollar, and accordingly we will remain somewhat confused until the end of this week, because as we mentioned, the recent hike, if followed by a lack of confirmation of the hike, will be a thorn in the side.
Gold’s relationship to inflation:
The explicit and direct relationship ‘the higher the inflation, the higher the gold and vice versa, and with inflation reaching record levels at the beginning of the year 2023, but gold did not benefit from this file and could not overcome the steel resistance of 2070, even with the most times that economies faced in the last period through food supply chains and the war of Russia and Ukraine and the global inflation crisis and gold did not benefit and did not achieve a new peak higher than 2070, but let us shed a little light on the economic recession (if) it happened only then will gold benefit in entering the global economy And the US is in a state of stagnation, and this stagnation may lead to a global financial crisis, then we will see gold easily exceeding 2070 levels, reaching 2400, and perhaps to 3000 levels.
Technical Analysis :
In the short term, gold is exposed to clear selling pressure on the MACD and the moving average 50, and an attempt to build a preemptive head and shoulders pattern as shown in the above chart, that is, by breaking the 1957 levels and stabilizing below them, we will see a test of the 1945 support, including a rise to form the right shoulder of the pattern, followed by a drop to the 1930 levels.
In the medium term:
The above drawing on the daily time frame confirms that gold is about to lose its bullish momentum, and it retested the broken trend at 1988 levels last week, and we expect that now, as long as gold is below 1988 levels, it will target 1900 levels.
The long-term :
Undoubtedly, and on the weekly time frame, it becomes clear to us that gold is still on the rise, and what it needs is only to surpass the levels of 2070 in order to complete its journey to the levels of 2400 and 3000.
We wish you a successful week and stress the importance of caution in trading it.
note:
All of the above is personal diligence and study of market conditions, the decision remains for the speculator
An investor with knowledge of the risks of this decision.
2023-07-24 16:29:00
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