Weekly Outlook on Gold - 2 May 2023

Gold prices traded lower on Friday, extending losses into the third straight session in a row after the U.S. inflation and jobless claims data, and raised fears of more rate hikes in the coming sessions. Gold prices fell below the $2000 mark, while yields surged after data showed that personal consumption expenditures prices read much hotter than expected in the first quarter of 2023.

The central bank is widely expected to raise interest rates by 25 basis points when it meets next week, with any signals on the future of monetary policy being closely watched. While, the U.S. senate showed no sign of moving to avoid a looming debt-ceiling crisis on Thursday, as Republicans rejected calls to raise the $31.4 trillion limit without conditions and democrats dismissed the idea of talks.
 

COMEX gold prices traded below $2000 levels on Friday's session as the dollar recovered some momentum. The DXY is returning to 101.60 even as the treasury yields slides further. Technically, gold may find some difficulty, holding above $2000 levels while, at the same time, bearish corrections seem limited. The price has shifted below 21-days SMA on the daily chart. An indicator MACD & Stochastic showed a negative crossover that indicates a bearish move in the near term. On the lower side, the price may find support around $1970 while, on the upside, $2027 would act as resistance for the prices.

On the MCX front, the gold prices were moving under pressure after making an all-time high at 61371 while the trend remains bullish on account of economic concerns. On the daily timeframe, the price traded in a narrow range with weak momentum that suggests a slight correction in the coming week.

Moreover, the price has sustained below the Upper Bollinger Band formation and RSI witnessed negative divergence on the chart. So, based on the above structure, we are expecting a sideways to bearish move in Gold for a near term. Traders are advised to follow the sell on rise strategy and also keep an eye on the important data release & FOMC statement in the coming week.  

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