Ichimoku Analysis (4-hour chart)
Tenken-Sen- $1991.78
Kijun-Sen- $1998.85
Gold prices showed a massive sell-off on US debt ceiling optimism and hawkish fed. US President Biden and top congressional Republican Kevin McCarthy are hopeful of a deal on the $31.40 trillion federal debt ceiling soon. It hits a low of $1975 and is currently trading around $1980.09.
Major economic data for the day
May 18th, 2023, US Initial jobless claims (12:30 pm GMT)
US Philly Fed Manufacturing Index (12:30 pm GMT)
US dollar index- Bullish. Minor support around 102.30/101.50. The near-term resistance is 103/103.60.
According to the CME Fed watch tool, the probability of a 25 bpbs rate hike in June increased to 29% from 0.40% a week ago.
The US 10-year yield showed a minor jump in hopes of a 25 bpbs rate hike by the Fed. The US 10 and 2-year spread narrowed to -58.80 from -108%.
Factors to watch for gold price action-
Global stock market- bullish (negative for gold)
US dollar index - Bullish (negative for gold)
US10-year bond yield- Mixed (neutral for gold)
Technical:
The near–term support is around $1970, a break below targets of $1955/$1935.The yellow metal faces minor resistance around $2000, and a breach above will take it to the next level of $2020/$2040/$2070/$2100/$2150.
It is good to buy on dips around $1970 with SL around $1950 for TP of $2070/$2100.
