[Bitop Market Review] Gold Strategy Analysis on May 02, 2024
Federal Reserve Holds Steady, Powell Maintains Rate Cut Signals, Gold Prices Rise!
On Thursday (May 2), during the early Asian session, spot gold edged lower around $2,310.07 per ounce in a narrow range oscillation, but maintained most of the overnight gains. On Wednesday, the price of gold climbed over $30 as the Federal Reserve announced it would keep interest rates unchanged and hinted at “lack of further progress” in achieving its 2% inflation target. However, Federal Reserve Chairman Powell indicated that the next move is unlikely to be a rate hike, adding that the Fed’s focus has been on maintaining the current restrictive policy stance. The US dollar and US Treasury yields fell after the Fed’s rate decision and Chairman Powell’s speech, leading to a sharp increase in gold prices above the $2,300 level.
In terms of data, the April US private sector employment (ADP) increase exceeded expectations, implying that the labor market maintained momentum at the beginning of the second quarter. However, US job vacancies fell to their lowest level in three years in March, while the number of resignations declined, indicating loosening labor market conditions. The US April ISM Manufacturing PMI fell below the 50 threshold, also providing support for gold prices.
After nearly a week of repeated consolidation, gold showed a significant downward move yesterday, bringing the market back into a corrective trend. The daily chart structure shows that the large bearish candle engulfed the previous bullish candles, indicating a weak market sentiment. Short-term rebounds may still develop downwards, but avoid chasing short positions. Based on the magnitude of the previous two declines, support near $2,245 is possible from the current levels, but even if the market appears weak, avoid blindly chasing shorts.
The 4-hour chart shows a downtrend, but the possibility of forming a V-shaped reversal and building a double bottom cannot be ruled out. Bulls have begun to counterattack, with the upward trend of moving averages clearly visible, currently reaching the resistance near the 60-period moving average. MACD has a bullish crossover and continues to release positive momentum, putting the market into a bullish trend, while the KDJ indicator is currently near 100 after the bullish crossover, indicating a further potential uptrend.
Overall, short-term gold trading today is advised to focus on buying on pullbacks, with selling on high rebounds as a secondary strategy. Short-term resistance above is monitored around $2,325–2,330, while short-term support below is around $2,300–2,295.
Disclaimer: The article is contributed by the market analyst from Bitop market observation team. The content is solely for personal opinions and sharing. The analysis is time-sensitive and provided for reference and discussion only. It does not constitute any investment advice. The market is risky, so investing should be done cautiously.
