Gold Price Update: Minor Gain Amid Resistance, Eyes on $2,313 Pivot Point

Gold prices experienced a decline in the Asian trading session on Wednesday, with spot gold reaching $2,285.19 an ounce, following

Written by: Arslan Butt • Wednesday, May 1, 2024 • 2 min read

Last updated: Wednesday, May 1, 2024

Gold prices experienced a decline in the Asian trading session on Wednesday, with spot gold reaching $2,285.19 an ounce, following a notable retreat from the previous day’s positions above the $2,300 mark. This downtrend reflects broader market anticipations of a potentially hawkish stance from the Federal Reserve.

Federal Reserve Meeting: A Crucial Juncture for Gold Investors

The focus of global markets is firmly on the Federal Reserve’s upcoming policy announcement. Expectations are set for the central bank to hold interest rates steady, which could reinforce the higher-for-longer interest rate environment.

This scenario is typically negative for gold, as it enhances the yield on alternative investments.

Strong Economic Indicators Bolster Rate Hike Prospects

Contributing to the bearish outlook for gold are recent robust US economic figures, including an unexpected rise in the employment cost index, suggesting sustained inflationary pressures. These developments have led investors to adjust their expectations for an earlier rate easing, with predictions for a rate cut pushed to September at the earliest.

Global Tensions and Gold Demand

Despite these pressures, gold’s role as a safe-haven asset could be underscored by ongoing global geopolitical tensions and market volatility. Notably, China’s strategic gold acquisitions might signal broader economic defence measures, potentially influencing global gold markets.

As gold navigates through economic data releases and central bank policies, its role as a financial safe haven will be tested against the backdrop of rising yields and a strong dollar.

Gold Price Edges Up A Close Look at Key Technical Levels

Today, GOLD slightly increased to $2,288, marking a 0.08% rise. Currently positioned just below the crucial level of $2,313.75, the metal faces several resistance hurdles.

Immediate resistance lies at $2,352.13, with further barriers at $2,378.36 and $2,417.99, challenging any potential gains. Conversely, support is found at $2,273.69, with additional protective levels at $2,243.84 and $2,212.02, which could prevent further price drops.

50-Day and 200-Day EMAs set at $2,318.95 and $2,323.90, indicate a tight trading band.
A breakout below $2,315 could signal more declines, impacting the gold market outlook.