Article by: ETO Markets
Chinese imports increased by 8.4% year over year in April, above estimates of 5.4%. Furthermore, export growth was 1.5% as opposed to analysts' predicted 1.0% increase. In the midst of worries about possible further US tariffs on Chinese exports, these most recent numbers were a welcome surprise. Though it was somewhat less than predicted at $76.7 billion, the Trade Balance USD climbed to $72.35 billion from March's reading of $58.55 billion.
The Federal Reserve's aggressive statements have bolstered the value of the US dollar. The Federal Reserve Bank of Boston, stressed on Wednesday the significance of a time of slowing in the US economy in order to meet the central bank's 2% inflation objective.
Any prospective shift toward monetary easing will have to wait until 2025, according to the Reserve Bank of New Zealand. The RBNZ justified this position by pointing to greater-than-expected inflation pressures in the first quarter. A judgment along these lines might help the New Zealand Dollar.
The significant over-the-counter market investment, ongoing central bank purchases, and growing demand from Asian customers, especially China and India, were the primary factors driving the expansion in global gold demand. In addition, classic safe-haven assets like gold may see an increase due to the risk-averse climate and the uncertainty surrounding geopolitical tensions in the Middle East.
Because there are no significant economic data releases at the midweek point, the price of gold is trading favorably on Thursday. Nonetheless, a number of obstacles, like the strengthening US dollar and the hawkish remarks made by the US Federal Reserve, are probably going to limit the precious metal's upside in the near future.
The short-term outlook is ambiguous. locked at a flat 20-SMA on the 4-hour chart, XAU/USD is locked between a negative 100-SMA and a somewhat bullish 200-SMA. Technical indicators oscillated between their midlines with no discernible direction. A negative run will have to wait until the gold falls below the 38.2% retracement of the previous rally around $… , although bears may have greater prospects of a clear breach below the $… barrier.
The US anticipates that negotiations for a cease-fire in Gaza will be able to bridge the divide between Israel and Hamas. Israeli Prime Minister Benjamin Netanyahu was conversed with by US Central Intelligence Agency Director William Burns during his visit to Israel on Wednesday. WTI prices may be impacted by the Middle East's geopolitical tensions decreasing.
Once oil prices rise back over $… , a turnaround may take place; support will come from the 100-DMA and the rising trend line from December. The 200-DMA at $… and the 50-DMA at $… are the next upside targets to keep an eye out for potential profit-taking. Longer term, $… continues to be the major upward level.
The final firm barrier that could halt this fall is the crucial level at $… on the downside. There could be an accelerated selloff towards $… and $… if this level is not able to hold. That would imply giving up all of the gains for 2024 and a potential test of $ … for oil, the low from December 13.
