GOLD overheated!!!
Weekly Analysis 3 Mar, 2024
Important Update
The current support level stands at 2088, with no support seen on a daily basis prior to this. The recent surge from 2080 has cleared out all sellers, but new sellers are expected to enter the market soon. Buyers are expected to take profits in the range of 2200-2175. Once the market begins to drop, buyers are not likely to step in until it reaches 2088. The zone between 2088 and 2060 is considered a buy zone. The market appears to be overheated, upcoming news CPI release this week and the FOMC blackout period.
Last week, the strong Non-Farm Payrolls (NFP) report was revised down, justifying the call for five rate cuts. Despite indications that a recession is not near, with unemployment rates remaining below 4%, there are concerns about a soft landing. Consequently, banks are bullish on gold, predicting a price target of $3000. However, any downward movement in gold price, as indicated by a single red candle on the 1D chart, is likely to trigger profit-taking, with hedge funds already having secured profits at new highs, and new sellers to enter the market.
The sentiment towards gold remains overwhelmingly bullish, contingent upon further interest rate cuts and the initiation of quantitative easing (QE) this week. Failure to act could spell trouble for not only gold but also Bitcoin (BTC) and the S&P 500. Past actions by the Federal Reserve, such as the interest rate hike in June despite the collapse of the SVB bank, suggest that even if rates are cut, a super-hawkish stance could undermine the bullish outlook for gold.
Important Update
The current support level stands at 2088, with no support seen on a daily basis prior to this. The recent surge from 2080 has cleared out all sellers, but new sellers are expected to enter the market soon. Buyers are expected to take profits in the range of 2200-2175. Once the market begins to drop, buyers are not likely to step in until it reaches 2088. The zone between 2088 and 2060 is considered a buy zone. The market appears to be overheated, upcoming news CPI release this week and the FOMC blackout period.
Last week, the strong Non-Farm Payrolls (NFP) report was revised down, justifying the call for five rate cuts. Despite indications that a recession is not near, with unemployment rates remaining below 4%, there are concerns about a soft landing. Consequently, banks are bullish on gold, predicting a price target of $3000. However, any downward movement in gold price, as indicated by a single red candle on the 1D chart, is likely to trigger profit-taking, with hedge funds already having secured profits at new highs, and new sellers to enter the market.
The sentiment towards gold remains overwhelmingly bullish, contingent upon further interest rate cuts and the initiation of quantitative easing (QE) this week. Failure to act could spell trouble for not only gold but also Bitcoin (BTC) and the S&P 500. Past actions by the Federal Reserve, such as the interest rate hike in June despite the collapse of the SVB bank, suggest that even if rates are cut, a super-hawkish stance could undermine the bullish outlook for gold.
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