Gold is trading near a critical weekly area, the 2,000 zone, and just broke out of an ascending formation that is currently being retested.
From an Elliott Wave perspective, Gold may have finished (5) waves of big wave 5 possibly indicating the start of a corrective cycle. If this scenario is valid, Gold may retest its previous wave (iv) at around 1,935.
Breaking below the previous wave may signal further downside toward retesting the 61.8% Fibonacci Retracement level at 1,897. Breaking below 1,897 will push Gold for further downside towards retesting the daily previous wave 4 at 1,808.
From a fundamental perspective, the Fed is still expected to raise interest rates by 25 bps in May; however, the real question is whether the Fed will continue raising interest rates until the end of the year or will it adopt a looser-than-expected policy in order to prevent the "mild recession" that Fed Governors are expecting. If the Federal Reserve decides to raise interest rates by 25 bps for the last time in May, this could limit the upside increase in the price of Gold in the short run.
Furthermore, something that also should be taken into consideration in the upcoming days/weeks is the severity of the tightening of lending standards as banks may not be done tightening lending standards, which will restrict access to credit, hurt business investment, reduce business formation, and weigh on job growth and consumer spending.
Note that for the people that are seeking buy opportunities, I can assure you that there won't be any buy opportunities until a correction takes place towards the pivot levels that were mentioned above.
Good luck!
M.Y.
From an Elliott Wave perspective, Gold may have finished (5) waves of big wave 5 possibly indicating the start of a corrective cycle. If this scenario is valid, Gold may retest its previous wave (iv) at around 1,935.
Breaking below the previous wave may signal further downside toward retesting the 61.8% Fibonacci Retracement level at 1,897. Breaking below 1,897 will push Gold for further downside towards retesting the daily previous wave 4 at 1,808.
From a fundamental perspective, the Fed is still expected to raise interest rates by 25 bps in May; however, the real question is whether the Fed will continue raising interest rates until the end of the year or will it adopt a looser-than-expected policy in order to prevent the "mild recession" that Fed Governors are expecting. If the Federal Reserve decides to raise interest rates by 25 bps for the last time in May, this could limit the upside increase in the price of Gold in the short run.
Furthermore, something that also should be taken into consideration in the upcoming days/weeks is the severity of the tightening of lending standards as banks may not be done tightening lending standards, which will restrict access to credit, hurt business investment, reduce business formation, and weigh on job growth and consumer spending.
Note that for the people that are seeking buy opportunities, I can assure you that there won't be any buy opportunities until a correction takes place towards the pivot levels that were mentioned above.
Good luck!
M.Y.