[Bitop Review] The Federal Reserve May Raise Interest Rates Again, Gold Prices Facing Increased Selling Pressure
On Thursday (May 23) during the European session, gold continued its downward trend, briefly hitting a more than one-week low around $2354.64 per ounce. After losing momentum in its recent rally, spot gold fell over 1% the previous day. The minutes from the Federal Reserve’s meeting indicated a strong likelihood of further rate hikes. The minutes noted: “Several participants mentioned that they would be willing to further tighten policy if inflation risks materialize in an appropriate manner.” The increased possibility of additional Fed rate hikes has pressured gold prices, leading to greater selling pressure.
Additionally, the preliminary values for the U.S. Manufacturing and Services Purchasing Managers’ Index (PMI) for May will be released tonight. Weak data might spark hopes for a Fed rate cut and support gold prices.
From a daily chart perspective, gold surged earlier this week but has since retreated. After forming a shooting star candlestick on Monday, prices continued to decline, showing an evening star bearish pattern. Yesterday’s significant drop pierced both the 5-day and 10-day moving averages, suggesting an initial phase of adjustment. However, the process remains volatile and repetitive. Yesterday’s substantial decline set the tone for further adjustments, with larger oscillations expected. The upcoming movement will likely be a step-by-step retracement rather than a single, unidirectional move. Thus, operations should be handled in several short-term segments.
On the 4-hour chart, a series of bearish candlesticks caused the Bollinger Bands to open downward, with prices continuously breaking previous highs at $2397-$2378. The short-term trend appears bearish, but not yet strong enough to form a unilateral downward trend. Today’s market is expected to see further downward inertia. In summary, the short-term strategy for gold today suggests prioritizing selling on rebounds and buying on pullbacks, with key resistance around $2375-$2380 and key support around $2350-$2345.
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.
