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Shamshad alam khan
Feb 02, 2023 11:42AM ET
superb analysis
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Gold Traders Await Fed’s Move While Momentum Shows Exhaustion Ahead
www.investing.com/analysis/gold-traders-await-feds-move-while-momentum-shows-exhaustion-ahead-200634913
Gold Traders Await Fed’s Move While Momentum Shows Exhaustion Ahead
By Satendra Singh | Feb 01, 2023 09:00AM ET Analyzing the movements in gold futures contract, I find that despite a surge in bullish outlook till last week as the expectations were tilting towards a breakout above $2000, persisting exhaustion kept gold futures below $1,950.
No doubt, recessionary fear seems to be on hold as Europe has tried a lot to avoid this during the fourth quarter of last year despite a steep surge in oil and gas prices, with supportive economic growth during this quarter.
Gold futures slid after hitting a peak on Mar. 3, 2022, at $2,079 and tested the year’s low at $1,618.60 on Nov. 3, 2022.
After forming a base at $1,622, a level tested three times on Sept. 28, Oct. 21, and Nov. 3, the gold futures started an uptrend as the recessionary fear started to surge.
Undoubtedly, gold futures are facing stiff resistance since Jan. 16, 2023, above $1,932, as economic data during the first quarter of this year looks evident enough to skip recessionary fear as most of the major corporates have controlled their expenditure to keep profit margins intact.
Despite a sudden surge in volatility in gold prices this week, the Federal Reserve could raise rates by 25 basis points from 4.50 to 4.75 and raise expectations for a slow pace of tightening in upcoming meetings of the Fed.
Technically speaking, in the weekly chart, despite a steep reversal from the weekly low at $1,900, the weekly candle is still below the immediate resistance at $1,956.
If gold futures do not hold above this immediate resistance after the Fed’s interest rates decision, a sell-off could trigger, which could remain till this week's closing.
In the daily chart, despite the formation of a small bullish dozy, which is still below the immediate resistance at $1,950, it looks evident that there could be a surge in selling pressure as soon the Fed opens its cards tonight.
In the 15-minute chart, gold futures could see wild price swings after the announcements of interest rate decisions if there is any change in the pace of hikes during the upcoming meetings of the Federal Reserve.
I conclude that gold futures could see sharp exhaustion if it doesn't find a breakout above $1,956.
Disclaimer: The author of this analysis does not have any position in Gold futures. Readers are advised to take any position at their own risk.
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Gold Traders Await Fed’s Move While Momentum Shows Exhaustion Ahead
Comments (5)
Sudhir Kumar Babharey
Feb 01, 2023 8:46PM ET
your analysis is punctured by the price action.
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Vivek Singh
Feb 01, 2023 8:24PM ET
He said there could be selling pressure after Fed decision. And as expected, Gold has moved up, once again proving that Satendra is a reverse indicator.
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CA Naveen Reddy pathuri
Feb 01, 2023 10:38AM ET
pls trade against him you get good profit . already proved in natural gas
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Edward Mmary
Feb 01, 2023 10:38AM ET
wooow it's true how did you know the morning move😱
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Abhay Agrawal
Feb 01, 2023 9:41AM ET
thanks satendra sir,great to read your view on gold after a long time
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