Published on May 22, 2023

Daily Analysis For GOLD (XAU/USD) 22-05-2023

Gold (XAU/USD) Analysis

Economic Events and Scenario for XAU/USD (GOLD)

Economic Events :-

GMT	Event	Impact	Currency
00:50	(Japan) Machinery Orders YoY	Medium	JPY
00:50	(Japan) Machinery Orders MoM	Medium	JPY
01:00	(Canada) Victoria Day	None	CAD
01:00	(Montenegro) Independence Day	None	EUR
02:15	(China) Loan Prime Rate 1Y	Medium	CNY
02:15	(China) Loan Prime Rate 5Y	Medium	CNY
05:30	(Netherlands) Consumer Confidence	Medium	EUR
06:00	(Estonia) PPI YoY	Low	EUR
06:00	(Estonia) PPI MoM	Low	EUR
07:30	(Switzerland) Industrial Production YoY	Medium	CHF
08:00	(Slovakia) Current Account	Low	EUR
09:00	(Greece) Current Account	Low	EUR
09:00	(Australia) Myfxbook AUDUSD Sentiment	Medium	AUD
09:00	(Switzerland) Myfxbook USDCHF Sentiment	Medium	CHF
09:00	(Japan) Myfxbook USDJPY Sentiment	Medium	JPY
09:00	(European Union) Myfxbook EURUSD Sentiment	Medium	EUR
09:00	(United Kingdom) Myfxbook GBPUSD Sentiment	Medium	GBP
09:00	(Canada) Myfxbook USDCAD Sentiment	Medium	CAD
09:00	(New Zealand) Myfxbook NZDUSD Sentiment	Medium	NZD
10:00	(Belgium) Consumer Confidence	Low	EUR
10:00	(Euro Area) Construction Output YoY	Low	EUR
10:45	(European Union) EU Bond Auction	Low	EUR
11:00	(Ireland) Wholesale Prices MoM	Low	EUR
11:00	(Ireland) Wholesale Prices YoY	Low	EUR
11:00	(Luxembourg) Unemployment Rate	Low	EUR
11:30	(Portugal) Current Account	Low	EUR
13:00	(Kosovo) Balance of Trade	Low	EUR
13:30	(United States) Fed Bullard Speech	Medium	USD
14:00	(France) 3-Month BTF Auction	Low	EUR
14:00	(France) 12-Month BTF Auction	Low	EUR
14:00	(France) 6-Month BTF Auction	Low	EUR
15:00	(Euro Area) Consumer Confidence	Medium	EUR
15:50	(United States) Fed Barkin Speech	Medium	USD
15:50	(United States) Fed Bostic Speech	Medium	USD
16:30	(United States) 3-Month Bill Auction	Low	USD
16:30	(United States) 6-Month Bill Auction	Low	USD
20:00	(El Salvador) Balance of Trade	Low	USD

Today's Scenario: - The price of gold (XAU/USD) has experienced a two-week downtrend but is currently showing signs of a corrective bounce as markets prepare for important data and events. The rebound in the precious metal can be attributed to mixed concerns regarding the expiration of the US debt ceiling. While President Joe Biden remains hopeful of avoiding default, Republicans appear less inclined to compromise, which has stalled previous negotiations. Additionally, a shift in the tone of Federal Reserve Chair Jerome Powell, who has cited concerns about the banking sector as a reason to ease pressure for higher interest rates, has also supported an upward movement in XAU/USD. Furthermore, positive expectations from China have added strength to gold buyers as they contend with bearish sentiment.

On the other hand, the recent improvement in US economic data and expectations of a more hawkish stance from the Federal Reserve have exerted downward pressure on the price of gold. This highlights the significance of this week's US Purchasing Managers' Index (PMIs) and the Core Personal Consumption Expenditures (PCE) Price Index, which is the Fed's preferred measure of inflation, in determining the near-term direction of XAU/USD.

Buy Scenario: - According to our Technical Confluence Indicator, the price of gold is currently facing strong resistance around the $1,990 level. This resistance level is formed by the confluence of the 50-day moving average, Fibonacci 68.1% retracement level on a one-month timeframe, and the upper band of the Bollinger Bands on the hourly chart.

Before reaching this resistance confluence, the previous daily high and the 5-day moving average act as immediate barriers for any upside movement, with a resistance zone around $1,984.

Further to the upside, the upper band of the Bollinger Bands on the four-hour chart and Fibonacci 68.1% retracement level on a one-week timeframe indicate a potential hurdle near $1,995, followed by the key psychological level of $2,000, which coincides with Pivot Point one-day R2. Till we did not advise to buy XAU/USD.

Selling Scenario: - On the downside, there is support around $1,970, which is formed by the convergence of the Fibonacci 38.2% retracement level on a one-day timeframe and the middle band of the Bollinger Bands on the hourly chart. If this support is breached, the Fibonacci 23.6% retracement level on a one-week timeframe near $1,968 could come into play, potentially pushing the price lower towards the key support level at $1,954. This support level is formed by the lower band of the Bollinger Bands on the four-hour chart and the previous daily low.

It's important to note that a sustained weakness below $1,954 could give the bears more control over the gold price. We do not advise selling XAU/USD.

Support and Resistance Level: -