“Gold Price Forecast: Pay Attention to Strong Losses and Important Support Levels”

Investing.com – The most active June contract on Comex, New York, closed down $28.60, or 1.4%, on Friday, at $1,990.50. The lowest level for the gold session for the month of June was $1,982.35. Since reaching a more than three-year high of $2,048.60 on April 13, Comex’s most active gold contract has lost nearly 3%. And for the current week, it is down 0.6%, after last week’s drop of 0.5%.

On Investing.com, gold for June delivery showed a final post-settlement trading of $1,994.10.

The spot price of gold, which reflects physical trading in bullion and is being watched closely by some traders, settled down $21.17, or 1.1%, at $1,983.64. It also fell this week by 1%.

Gold’s latest weekly decline has begun after rebounding from last week’s one-year lows. Gold is a direct opposite trade to the dollar. Besides, a stronger dollar tends to affect external demand for commodities denominated in the currency. Rising Treasury yields also undermine the attractiveness of riskier assets, while also limiting foreign capital flows into the United States.

But the dollar’s relative weakness in the past 24 hours hasn’t helped gold.

Still, worries about gold have been fueling concern that the Federal Reserve will agree to another quarter-point increase in its interest rate decision on May 3, which would push US interest rates to a peak of 5.25% – versus the pandemic-era rate of just 0.25%. .

“Gold remains volatile heading into the weekend,” said Oanda analyst Craig Erlam. “Uncertainty about the path of interest rates, which should become clearer over the next month or two, is driving the indecision we see in gold at the moment.”

While Irlam noted that the rally in Treasury yields has halted the yellow metal’s rally, “it is clear that traders are not in the mood to give up the yellow metal.”

“Apparently, dips are being bought and it will be interesting to see if we see the same on this occasion as well,” he added. “The $1,940-$1,960 levels remain major support.”

Gold: price forecast

An upward recovery in gold would require a strong break above the 5-day exponential moving average, or EMA, of $1,996 and the horizontal resistance area at $2015 to retest the swing high at $2048, Sunil Diskett of SKCharting said.

Dixit said, “Going forward into the next week, if the Dollar Index breaks and holds above $101.95, we are likely to see a further rally in the direction of the Dollar towards the weekly Bollinger Bands at $103.10, followed by the 50-week Exponential Moving Average at $103.65. ” . This may push gold down towards the Fibonacci level at $1,955. In the event of any extended weakness, gold could reach the 50-day moving average of $1,943.”

Pay attention to the events and data that await the markets this week.

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