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Gold trading reminder: Gold prices are under pressure on the 21-day moving average, and the market is worried that Powell will turn hawkish

2024-04-30

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During the Asian session on Tuesday (April 30), spot gold fluctuated within a narrow range and is currently trading around $2,333.32 per ounce. Gold prices barely held on to the 2330 mark on Monday, helped by a weaker dollar, but were still under pressure below the 21-day moving average of 2340. The market focus turned to the Federal Reserve policy meeting and the U.S. non-farm payrolls data to be released this week for clues on the trajectory of the Federal Reserve interest rate.

Higher-than-expected March consumer inflation data released earlier this month prompted traders to lower expectations for a rate cut from the Federal Reserve. The market is currently worried that the chairman of the Federal Reserve will release a hawkish signal, which puts gold prices at certain downside risks in the short term.

"Gold market participants are basically waiting for this Friday's non-farm payrolls report," said Daniel Ghali, commodities strategist at TD Securities. “The Fed should be in no rush to cut interest rates given signs of persistently higher inflation and resilient economic growth, a view that markets have fully priced in.”

The Fed's two-day policy meeting will begin on April 30. The Fed is expected to keep its target interest rate range unchanged at 5.25%-5.5% at the end of Wednesday's meeting, according to CME Group's FedWatch tool.

The market is also paying close attention to U.S. non-farm payrolls data for clues about the Federal Reserve cutting interest rates.

Daniel Ghali, commodity strategist at TD Securities, said: "The market has underestimated the possibility of a 'in no rush' interest rate cut, and we think the possibility of the Fed's next move evolving into a rate hike is low, which shows the Fed's fund pressure on the gold market. Expectations have narrowed.

The last time Federal Reserve Chairman Jerome Powell spoke, he said policymakers were likely to keep borrowing costs high for longer than previously expected, citing a lack of progress in lowering inflation and continued strength in the labor market.

"Inflation is not exactly where they want it to be, but it's getting to the point where if the labor market falters a little bit, the Fed will quickly turn dovish," said Ross Mayfield, an analyst at Baird Investment Strategies in Louisville, Kentucky. Send remarks.”

According to CME FedWATCH, the probability that the Federal Reserve will keep interest rates unchanged until September is 42%, and the probability of cumulative interest rate cuts of 25 basis points, 50 basis points, and 75 basis points are 44.7%, 12.3%, and 1.1% respectively; the Federal Reserve will maintain interest rates until November. The probability of unchanged rates is 32%, and the probabilities of cumulative interest rate cuts of 25 basis points, 50 basis points, and 75 basis points are 44%, 19.9%, and 3.8% respectively.

Investors also need to pay attention to news related to the geopolitical situation in the Middle East.

Israeli airstrikes killed at least 25 Palestinians and injured many more on Monday, as Hamas leaders arrived in Cairo for a new round of talks with Egyptian and Qatari mediators.

Egyptian Foreign Minister Sameh Shoukry said Egypt was hopeful but still awaiting responses from Israel and Hamas.

There are few U.S. economic data on this trading day. Pay attention to the performance of the Eurozone's April CPI data and first-quarter GDP data.

The above information is provided by special analysts and is for reference only. CM Trade does not guarantee the accuracy, timeliness and completeness of the information content, so you should not place too much reliance on the information provided. CM Trade is not a company that provides financial advice, and only provides services of the nature of execution of orders. Readers are advised to seek relevant investment advice on their own. Please see our full disclaimer.

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Gold trading reminder: Gold prices are under pressure on the 21-day moving average, and the market is worried that Powell will turn hawkish

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