Gold (ounce in $) Towards a promising summer for the yellow metal?
Analysis published on Thursday, May 4, 2023
The turbulence in the banking sector in both the United States and Europe has amplified the rebound in the price of gold since the end of October 2022. To the point that it once again returned to its all-time highs during the last Fed meeting. Are we therefore going to witness a new failure under this glass ceiling around $2067? Or the exit of the widening bevel descending at a right angle from above?
With the debt ceiling in sight, the FED could show pragmatism by evoking a pause in its monetary tightening. This would benefit gold in a risk off environment. But one of the keys to new all-time highs would rest on a decline in real rates. And at this stage, their evolution stagnates between 1 and 1.5%.
A fall in real rates, which would be supported by a pause in the Fed’s rate hike cycle and possible tensions on the debt ceiling, would constitute catalysts for validating a favorable exit from the widening wedge descending at a right angle. With the objective of a promising summer which would see the barbarian relic rally $2516 with regard to the final theoretical objective of the chartist figure. Especially since an RSI in the overbought zone feeds a bullish feeling and not the opposite. Provided that the rebound structure is built on sound foundations.
Conversely, a third failure below $2067 would calm the ardor of the bulls, and vice versa would relieve short sellers. But the bulls would have a nice margin of safety as long as $1809 is not broken. Below this support, the lower limit of the descending broadening wedge at an angle of $1627 could be tested by the bears.
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