Gold short-term analysis shows momentum waning into US session – 05 May 2022
Although gold rallied yesterday, following the Fed-perceived dovishness, it remains weak on the daily time frame.
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Russell Shor is a Senior Market Strategist at FXCM, having been promoted to the role in 2025 in recognition of his depth of insight and consistent delivery of high-impact market analysis. He originally joined FXCM in October 2017 as a Senior Market Specialist.
Russell holds an Honours Degree in Economics from the University of South Africa, is a certified FMVA®, and a full member of the Society of Technical Analysts (UK). With over 20 years of experience in financial markets, his work is renowned for its clarity, precision, and strategic value across asset classes.
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Although gold rallied yesterday, following the Fed-perceived dovishness, it remains weak on the daily time frame.
The Dow Jones Industrial Average (DJI) jumped 2.8% yesterday after Fed Chair Jerome Powell said that the FOMC wasn't actively considering a 75bps hike. Instead, he suggested that 50bps was on the table for the next two meetings. This dovishness came after the Fed delivered a 50bps increase, in line with market expectations. It also clarified its balance sheet reduction, starting with $47.5bn/month in June and increasing over three months…
The core PCE reading of 5.2%, the higher than anticipated employment cost index, and tight labour conditions will trump the disappointing GDP contraction of -1.4% q/q (1.1% q/q forecast).
Oil is climbing following a proposal made by European Commission President Ursula von der Leyen to embargo Russian crude oil imports within the next six months. This ban will include both seaborne and pipeline supply. Moreover, refined products will be phased out by the end of 2022.
Bitcoin has dropped out of an ascending wedge. Dollar support is weighing heavily on the Cryptocurrency.
Gold charts a lower peak followed by a lower trough on its weekly chart.
BoJ diverges further away from Fed as it defends 25bps on its 10-year treasury. Core PCE moderates slightly, but employment costs are up. Advanced GDP stumbles to -1.4%contraction Q/Q. The RBA surprised with a 25bps hike, and the market looks to the Fed announcement on Wednesday for an expected 50bps hike and QT information. The market expects the BoE to raise rates by 25 bps, and Friday sees the NFP…
Bitcoin is starting to show weakness, dangerously falling out of a continuation pattern.
The required rate of return is in flux. This adjustment increases uncertainty in the financial markets.
The Fed's preferred measure of inflation, the core PCE index, registered a 5.2% increase YoY. This figure slightly moderates from the 5.3% a month ago, the highest reading since April 1983. Nevertheless, the Fed will still be concerned with controlling inflation, given that its price target is an average rate of 2%. Therefore, next week Wednesday, 5th May, the Fed is expected to hike rates by 50bps. Moreover, the central…
The US30 is looking fragile ahead of today's cash open.
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