2:13 PM · 2 May 2022

⏬⏬Gold falls nearly 2%

Gold lost almost 2% in the first session of May and is trading at its lowest since mid-February. As recently as Friday, gold was trading near the 1920 USD level, and today it is almost $60 lower. Gold thus overcomes the support associated with the 50 retracement of the entire rebound lasting from February 2021 to early March this year. It seems that a 50 basis point hike by the Fed is already fully priced in by the market. Yields on 10-year bonds are almost back to the 3% level, which is putting additional downward pressure on gold. We can also see ETFs starting to sell off gold. The key support for gold at this point is located at $1825-1830 per ounce. We believe that gold has a chance to rebound after the rate hike decision if there is no increase in the hawkish stance. A more strongly hawkish message would have to include indications of a desire to sharply reduce the asset balance. Today at 3:00 pm BST the ISM reading for manufacturing. These are important data in the context of Friday's NFP report.

Source: xStation5

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