The main factors affecting the rise in gold prices next week

1. The price drops sharply on the weekly chart, with a high probability of a strong rebound (the strongest bullish technical factor)
Gold is down $220 (4.5%) from its high of $4,889. The weekly RSI fell to the oversold mark of 29, and the KDJ formed a golden cross at a lower level. Historically, a weekly RSI break below 30 followed by a golden cross indicates a 90% chance of a strong bounce up to $50-80. The daily/4-hour chart shows a triangle consolidation at the bottom. This support level has tested 4700 points three times without being broken, indicating strong buying pressure. A strong rebound is expected, with 4750 seen as an initial target and 4780 seen as a key level in determining price strength. After the market’s sharp decline this week, prices have stabilized, downward momentum has completely subsided, selling pressure has eased, and a reversal is inevitable. Buyers will control the recovery next week.

2. Next week’s Federal Reserve meeting may send a signal of loose monetary policy, boosting expectations for interest rate cuts (macroeconomic catalyst). At present, market expectations for interest rate cuts are low, with the probability of a rate cut in June being only 5.1%. However, the end of Powell’s polls this week, growing expectations for Warsh’s appointment, and pressure from the White House to cut interest rates, suggest that next week’s meeting may signal an easing of monetary policy, suggesting a slowdown in interest rate cuts and balance sheet tightening in September. If this situation becomes a reality, it will directly strengthen expectations of interest rate cuts, causing the dollar and U.S. Treasury bonds to fall sharply, real interest rates to fall, and funds to flow to gold, thus pushing the price of gold to break through $4,780, with a target range of $4,820-4,850. Historically, when the Fed signals easing, gold has an 85% chance of rebounding, with prices between $40 and $60. This time, expectations have been reversed, and a rise in gold prices is almost certain.

Source link