Mostly a strong demand for gold from China`s investors pushed the price of gold 13% higher during the course of this year, but as the market has stabilised, the investors are turned to the estimate of potential Fed's rate cuts during the course of this year. Previous week was the worst one for the price of gold for the last five months. There has been a sharp move to the down side from the level of $2.447 toward $2.325. Gold ended the week at level of $2.333. As per current market estimate, there is around 50% chance that the Fed will cut interest rates in September, however, traders think with 65% probability that the first rate cut will occur in November. As PCE data for April are coming in the week ahead, some further volatility in the price of gold might be expected.
The RSI dropped below the level of 50, ending the week at 47. The market is slowly starting to look at the oversold market side. Still, the moving average of 50 days continues its convergence from its MA 200 counterpart, so there is still no indication of potential trend change.
Current charts on the price of gold are a bit mixed. There is a short channel with the uptrend started in April which is pointing to a potential for a breaking point. Namely, if the price of gold manages to sustain levels around $2.320 then the upside is imminent. Based on the channel the next high stands at $2.440. However, if the $2.320 is clearly breached to the downside, then the next stop might be below the $2.300 support line, probably around $2.280.
The RSI dropped below the level of 50, ending the week at 47. The market is slowly starting to look at the oversold market side. Still, the moving average of 50 days continues its convergence from its MA 200 counterpart, so there is still no indication of potential trend change.
Current charts on the price of gold are a bit mixed. There is a short channel with the uptrend started in April which is pointing to a potential for a breaking point. Namely, if the price of gold manages to sustain levels around $2.320 then the upside is imminent. Based on the channel the next high stands at $2.440. However, if the $2.320 is clearly breached to the downside, then the next stop might be below the $2.300 support line, probably around $2.280.
