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Gold continues moving lower, as progress appears to have been made in prevented the US
from defaulting on its debt, with traders awaiting the FOMC May meeting minutes tomorrow
and the Core PCE rates on Friday. Furthermore, at the time of this report, it appears that the
shiny metal is moving in a downwards fashion. In this report, we aim to shed light on the
catalysts driving the precious metal’s price, assess its future outlook and conclude with a
technical analysis.
XAUUSD H4 Chart
Gold’s price seems to move in a downwards fashion, having broken below its prior support
which has now turned resistance at 1975 (R1). We maintain a bearish outlook for the bullion,
with the RSI indicator below our 4 hour-chart failing to break above the reading of 50 on
numerous occasions, indicative of a continued bearish sentiment surrounding the precious,
as the US debt talks progress. For our bearish outlook to continue, we would like to see a clear
break below the 1950 (S1) support level with the next target for the bears being the 1925 (S2)
support base. On the other hand, for a bullish outlook, we would like to see a clear break
above resistance at the 1975 (R1) line, with the next potential target for the bulls being the
2005 (R2) resistance barrier, which would also coincide with the break above the key $2000
psychological barrier. Please note that should the US debt talks break down or reach an
agreement, we may see heightened market volatility within a short time period.