Fundamental analytics

Gold has updated the annual maximum on the comments of the head of the Federal Reserve Bank of New York, John Williams


On Thursday, gold continued its upward movement, once again updating the multi-year trading highs. At the same time, the most interesting events on the market took place in the second half of the American trading session. Statements by the New York Fed President John Williams about the need for a sharp reduction in interest rates really shook up all financial markets, as investors took these comments as a hint of a possible reduction in interest rates at the July FOMC meeting by 0.5%.

Later, representatives of the Federal Reserve Bank of New York tried to reassure the markets, noting that the scientific report that Williams presented at the conference did not show the real monetary policy decisions at the next Fed meeting. After these comments, the dollar partially won back previously lost positions, and gold, after testing the level of $ 1,453, rolled back to $ 1,440, where trading is now taking place.

Among the most significant events in the economic calendar today is the publication of preliminary indices from the University of Michigan on consumer sentiment and expectations. But, after yesterday's shake-up, the most strong attention of investors will be riveted on the speeches of the representatives of FOMC Bullard and Rosengren.

In our opinion, after another update of the annual maximum, which in fact occurred on the misinterpretation of the market commentary by the head of the Federal Reserve Bank of New York, many investors started fixing long positions in gold, which could lead to the formation of a fairly strong kickback movement.

On the chart, we note the signs of formation of a false breakdown of the level of 1438.00. The price is trying to consolidate below this mark, which will be for us a strong reversal signal, and we can expect the formation of a bearish wave with a target at the level of 1383.00.

Resistance Levels: 1438.00, 1448.00, 1455.00;

The levels of support: 1420.00, 1405.00, 1383.00.

The main scenario - consolidation below 1438.00 and intraday decline to the area of ​​1420.00.

Alternative scenario - consolidation above 1438.00 and growth to 1455.00

Despite strong local growth, bearish signals now prevail in the market, therefore, within the day, we give preference to shorts, which should be considered in the range between the levels of 1438.00 and 1442.00.