Gold Prices Rise on Fed’s Hints of Halting Interest Rate Hikes Amid Economic Uncertainties

Key Takeaways

Gold prices are edging higher on Thursday after the U.S. Federal Reserve suggested it may stop raising interest rates soon. This move would make gold a better investment option since speculators tend to find it more attractive when interest rates are low.

At 06:00 GMT, June Comex gold futures are trading $1996.90, up $30.10 or +1.54%. XAU/USD is at $1976.79, up $7.06 or +0.36%. On Wednesday, the SPDR Gold Shares ETF (GLD) settled at $183.39, up $3.02 or +1.67%.

Gold Prices Surge as Fed Hints at Pause in Rate Hikes Amid Economic Uncertainties

Gold prices increased by 2% on Wednesday after the Fed raised interest rates as expected, but also hinted that it may not increase rates again soon due to the recent collapse of two U.S. banks. Gold is often considered a good investment during times of inflation and economic uncertainty.

However, the Fed has made it clear that it is more focused on fighting inflation than on cutting rates, and it may raise rates further if necessary. The language used by Fed Chair Jerome Powell during his press conference was carefully watched by investors.

Despite this, some analysts believe that the current economic and financial uncertainty, combined with fewer expected Fed rate hikes, will encourage more investors to consider precious metals like gold.

Daily June Comex Gold Technical Analysis

The main trend is up according to the daily swing chart. A trade through $2031.70 will reaffirm the uptrend. A move through $1830.20 will change the main trend to down.

The minor trend is also up. A trade through $1953.70 will change the minor trend to down. This will shift momentum to the downside.

The minor range is $2031.70 to $1953.70. The market is currently testing its retracement zone at $1992.70 to $2001.90.

The nearest resistance is the April 18, 2022 main top at $2045.80. The closest support is a minor 50% level at $1968.90.

Daily June Comex Gold Technical Forecast

Trader reaction to $1992.70 and $2001.90 is likely to determine the direction of the June Comex gold futures contract on Thursday.

Bullish Scenario

A sustained move over $2001.90 will indicate the presence of buyers. If this creates enough upside momentum then look for a surge into the main top at $2031.70, followed by $2045.80.

Bearish Scenario

A sustained move under $1992.70 will signal the presence of sellers. If this generates enough downside momentum then look for a break into $1968.90, followed by $1953.70.