Gold (XAUUSD) Analysis – 3rd May 2024

may gold analysis 2024


Before the Major Nonfarm Payroll Data release, XAUUSD is at 2296.56. Comparing with April’s NFP, just before the release, the range was $2292-$2299 striking similarity. After the data release, in 7 trading days, XAUUSD hit a record high of $2428.It’s Crucial to Consider various factors and data points before this month’s NFP data release are mentioned below.

The Fed policy actions Might Induce Recession in USA ?

Persistent inflation raises recession concerns for the US economy despite Fed efforts. Essential prices remain high, prompting caution from major central banks like the ECB and RBI against premature rate cuts. Rising oil prices, China’s growth slowdown, and geopolitical tensions add to economic challenges. Balancing inflation control with fostering economic growth is crucial, as high-interest rates can limit spending and job creation. Effective economic policies and communication are vital for maintaining global economic confidence.

The US Debt Issues:

The US faces a dire national debt crisis, reaching nearly $35 trillion, surpassing its $28 trillion GDP. This 123% debt-to-GDP ratio indicates unsustainable borrowing, leading to higher domestic and global interest rates. The IMF warns of severe consequences due to persistent fiscal deficits and rising interest payments, exceeding the defence budget at $870 billion. CEOs emphasize the urgency of sustainable fiscal practices, citing political gridlock hindering crucial debt containment measures. Failure to act risks both US economic stability and global financial health, necessitating immediate corrective action.

Fundamental Which Might Effect XAUUSD:

1. The upcoming US job market report is expected to show strong growth, but concerns arise from rising wages impacting labour costs. Despite Powell’s optimism about job market balance, recent wage data paints a different picture, with labour costs and unit labour costs surging in Q1, signalling inflationary pressures.

2. Despite higher wages being good for workers, their rapid growth doesn’t meet the Fed’s inflation goals. Powell sees improved supply-demand balance with fewer job openings, partly due to immigration. Yet, wages consistently above 4% signal ongoing inflation risks, diverging from the Fed’s targets.”

3. Economists anticipate a 4% year-on-year increase in April payrolls, slightly lower than March. California’s new $20 minimum wage adds uncertainty, with local wage hikes compounding. Strong job growth and easing wage pressures will affect the Fed’s policy, potentially impacting future rate decisions.

Technical Level and Analysis:

Buy at: $2285-$2261-$2238-$2210-$2185
Sell at: $2328-$2352-$2377-$2405-$2428

Warning: Do not risk more than 5% of your capital. You might lose your money.

Key Support and Resistance Levels:

Key Support and Resistance Levels for XAU/USD are outlined for informed trading decisions.

Support Levels (S):
Resistance Levels (R):

Ongoing Geo-political Tensions:

Israel – Iran
Russian – Ukraine
US-China Relations:
Middle East Instability

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