Navigating The Gold Market Storm: Geopolitical Strains, Fed Anxiety, And Economic Swings

Gold ingots and coins close up — Anthony Bradshaw

Fundamentals

Last week, three big things affected gold prices: tensions in the Middle East, expectations about the US Federal Reserve, and economic news.

At the start of the week, tensions between Iran and Israel calmed down a bit, making investors less worried. This led to a drop in gold prices. But in Europe, gold prices fell even more, testing a level around $2300. This showed that some people still thought gold was worth buying, even at these lower prices.

During the week, not much new economic data came out, and the Federal Reserve didn’t say much before their meeting. This kept gold prices fairly steady, around $2320.

Then on Thursday, a report came out showing that the US economy didn’t grow as much as people thought in the first part of the year. This news should have made gold prices go up because it suggests the economy might be weak, and gold is often seen as a safe investment during uncertain times. But the reaction was pretty small, maybe because people were still trying to figure out what it means for the Federal Reserve’s next steps.

Towards the end of the week, gold prices started going up again, reaching $2350 on Friday morning. This shows that some investors still see gold as a safe place to put their money when things are uncertain.

But by the end of the week, prices had cooled a bit to around $2340. This was partly because another report showed that inflation might be a bit higher than expected, which made gold slightly less attractive.

Next week is going to be important for gold prices because the Federal Reserve is meeting, and there’s going to be a new report about how many jobs were created in April. These events could give us a better idea of where gold prices might be headed.

Let’s take a look at next week’s standard deviation report and see where we can identify some short-term trading opportunities in this historical market.

GOLD: Weekly Standard Deviation Report

Apr. 27, 2024 12:29 PM ET

Summary

Gold futures closed above the 9-day SMA, indicating bullish trend momentum for the week.
Closing above the VC PMI confirms bullish price momentum for the week.
Profit-taking levels for long positions suggest selling or taking profits as the price reaches certain levels during the month.