Article by: ETO Markets

Tuesday marks the release of the US Producer Price Index for April as well as the speech of Fed Chair Jerome Powell. The focus will turn to the US Consumer Price Index, which is anticipated on Wednesday. These publications may provide information about when the Fed will make its first rate adjustment. The chance of a Fed rate drop may be dampened by the higher-than-expected inflation statistics, which would be detrimental to the precious metal. Because owning gold comes with a greater opportunity cost, higher interest rates may decrease the demand for gold as an investment overall.

The 4-hour chart shows a progressively pessimistic outlook. Technical indicators with firmly bearish slopes approached their midlines on Friday, retreating sharply from overbought values. Simultaneously, XAU/USD is trading below a 20-SMA that is marginally positive, and a 100-SMA that is bearish converges with the Fibonacci level, highlighting its significance. A breakdown below the latter ought to allow for a $ … price zone test.