The continued gains of the US dollar still contribute to increasing the bearish momentum of XAU/USD gold prices. This caused a collapse to the support level of 1954 dollars an ounce, the lowest price for nearly two months. It settled around the level of 1975 dollars an ounce at the beginning of trading today, Wednesday, which receives the attention and control of investors and markets. The US Federal Reserve announced the content of the minutes of its last meeting, and before that, the focus will be on announcing British inflation figures. and interest rate decision by the New Zealand central bank.
Yesterday US stock indices fell, with the US government approaching the brink of defaulting on its debts, which could be disastrous. According to trading, the S&P 500 index fell 1.1% after US House of Representatives Speaker Kevin McCarthy said, “We’re not there yet” on a deal to prevent the US government from running out of cash. It followed a meeting late Monday that he and US President Joe Biden described as productive but ultimately ended without an agreement.
The Dow Jones Industrial Average fell 231 points, or 0.7%, while the Nasdaq Composite lost 1.3%. So far, the US stock market has remained largely resilient even as Washington approaches the June 1 deadline. This is when the United States government may not be able to pay its bills, unless Congress allows it to borrow more. Economists and investors widely believe that a default would send shock waves through the global economy and financial markets.
The assumption in Wall Street markets was that Congress would strike a deal at the eleventh hour, as it has already happened many times before, because the alternative simply seemed too difficult for anyone to allow. But the concern on Wall Street is that Washington may not feel the urgency to act until financial markets have been shaken hard enough to set fire to politicians in both parties.
Parts of Wall Street showed more concern, particularly in the bond market where some Treasury bills are supposed to be repaid close to the potential default date. The prices of these bonds have fallen, in part due to concerns about the debt ceiling, which in turn has led to higher yields. But the stock market did not show the same interest. According to analysts, this may be because it is difficult to know how prices will react across different markets to something that has never happened before and was previously unimaginable. He added that he had not taken any steps for the investments he oversees due to default concerns, at least not yet. He also said, “I think everyone takes it moment by moment.” and “Every minute that passes increases the urgency.”
Worries about the debt ceiling come on top of fears that a slowing economy could tip into recession, even without a default. A preliminary report released Tuesday morning indicated that the economy remains divided, with growth boosting for travel and other services companies while manufacturing remains under pressure.
- There is no change in my technical point of view for the performance of the XAU/USD gold price, only the performance on the daily chart below.
- The XAU/USD gold price is still in a bearish correction range.
- The bulls will not regain control of the trend without returning to the vicinity of the psychological resistance level of $2000 an ounce again.
At the same time, if the current gold selling operations continue, the bears may move prices towards the strongest support levels at 1945 and 1930 dollars an ounce, respectively. The XAU/USD gold price may remain moving in a narrow range with a bearish tendency until the markets and investors react to the results of the important US economic data and what will be issued by the US Federal Reserve.
Ready to trade today’s Gold forecast? Here are the best Gold brokers to choose from.