Gold prices didn’t do so well on Monday. They went up a bit but then went back down to the lower end of where they started during the first part of the day in Europe. This happened even though there was news about Iran attacking Israel over the weekend. At first, people were worried, but then they calmed down pretty quickly, especially when they saw that stock markets were mostly doing okay. Also, some folks think the U.S. Federal Reserve won’t lower interest rates anytime soon, and that’s making it harder for gold to do well because gold is often seen as a safe investment when things are uncertain.
People in the market were expecting the U.S. Federal Reserve to lower interest rates in June, but now they think it might not happen until September because inflation is still a bit high. This makes U.S. Treasury bond yields stay high, which makes it less attractive for traders to invest in gold, since gold doesn’t pay interest.
However, there’s still some tension because of Iran’s attack on Israel, which could lead to more problems in that area. Also, since there isn’t a lot of demand for the U.S. Dollar right now, that could help gold prices a bit.
Daily Digest Market Movers: Gold price fails to preserve intraday gains amid hawkish Fed expectations
Iran attacked Israel directly, which made people worry about a bigger war in the Middle East. This made the price of gold, which is seen as a safe investment in uncertain times, go up a bit on Monday.
Israeli leaders want to fight back, but the U.S. said it won’t join in, which calmed things down a bit and stopped gold prices from rising even more.
Also, last week, inflation in the U.S. was higher than expected, so investors now think the U.S. Federal Reserve won’t lower interest rates until September, instead of June like they thought before. This made the U.S. dollar stronger, which makes it harder for gold prices to go up.
Because of all this, people might not want to make big bets on gold until they see how things go with U.S. economic data coming out soon.
Technical Analysis: Gold price needs to move back above $2,372-$2,373 area for bulls to regain control
Looking at the daily chart of gold, there’s something called the Relative Strength Index (RSI), which helps show if gold is overbought or oversold. Right now, even though it’s dropped a bit from its highest point, it’s still in the overbought territory. This means gold might have a hard time going much higher.
If gold does manage to go up more, it might hit a tough barrier around the $2,371-$2,372 range, and it’s likely to stay below $2,400. But if it does break through, it could go back up towards its highest ever price, around $2,431-$2,432, which it reached last Friday.
On the other hand, there’s a price range between $2,334 and $2,332 that might stop gold from dropping too much. But if it does fall below that, it could go down further, maybe even reaching around $2,300.
If there’s more selling after that, it could mean gold won’t go up again for a while, and it might drop even more, possibly down to around $2,220, with some support along the way near $2,250.
