By Bhavik Patel
Gold costs are consolidating and has thus far ignored hawkish feedback from Federal Reserve Chair Jerome Powell. Market got here again into its tight buying and selling vary after touching $2000 initially of the week. But robust US Treasury yield which is inching in the direction of 3% is creating headwinds for gold. Powell stated {that a} half-point rate of interest improve might be “on the table” when the Fed meets in May, including it might be applicable to “be moving a little more quickly”. This is unfavorable for gold however the market stays unfazed by the remark as members have already factored 50 bps charge hike in May.
Helping gold is the truth that the U.S. greenback didn’t discover a lot traction because the Federal Reserve’s financial coverage stance is a stark distinction in comparison with the European Central Bank’s trajectory. ECB President Christine Lagarde, reiterated Europe’s extra affected person stance even because the area faces rising draw back dangers to the economic system and upside inflation pressures.
The key theme for treasured metals will stay Russia’s invasion of Ukraine, excessive inflation, financial progress considerations, and the upcoming rate of interest hikes by central banks. Demand for gold has been growing in opposition to rising inflation as we now have seen wholesome progress within the jewelry sector and inflows by Gold ETFs. The $1900 is sweet help for gold and any breach beneath that might push the outlook right into a unfavorable development.
Near time period charts have began exhibiting indicators of weak spot as costs are buying and selling beneath the 200 day transferring common. The 51000 is respectable help for gold in MCX whereas $1905 continues to stay robust help in COMEX. Gold has given breakout from inverse head and shoulder chart sample on hourly chart in MCX and has retraced to check the neckline. If costs break 52100 then the sample validation will finish.
Gold had moved from 52200 to 53600 after breakout from inverse head and shoulder sample. Now gold is on a crossroads the place if it trades above 53000, the upside momentum can proceed until 54000 whereas breaching the extent beneath 52100 would open doorways for 51000. Upside stays restricted on account of rising US Treasury yields and expectation of charge hike from the US. So we’re impartial for subsequent week and one can commerce lengthy above 53000 or quick beneath 52000. There is not any clear course for gold so long as it’s buying and selling within the vary of 52000-53000.
(Bhavik Patel is a commodity and foreign money analyst at Tradebull Securities. Views expressed are the creator’s personal. Please seek the advice of your monetary advisor earlier than investing.)
Source: www.financialexpress.com”