Market Analysis
XAUUSD
Technical Analysis
Gold price prediction for this week is still expected to rise significantly, due to the influence of the Middle East conflict coming into focus. This influence is also driving gold prices higher, with recent days witnessing attacks between Iran and Israel, which may potentially trigger World War 3. However, at present, the focus is on who will be the initial trigger for World War 3 in the future. Gold is currently attracting strong attention compared to the USD, as the US continues to support Israel and avoids involvement in any potential World War 3, causing investors to lose confidence in the USD and hesitate to invest in the US. While the USD is currently increasing due to inflation aimed at attracting back investors who fled due to de-dollarization, this seems to be temporary as the high USD debt affects overall confidence. The price trend is inclined towards strengthening and supporting an upward movement, with gold expected to reach the range of $2450 - $2500.
Fundamental Analysis
Gold has been shining towards record highs amidst geopolitical tensions, a weaker dollar, sluggish real yields, but with expectations of a sharp decline in interest rates, this rise in the precious metal may soon stall.
"We won't add to our gold exposure at current prices, seeing it as vulnerable in the 6-12 month timeframe as the market forward will increasingly price in less Fed rate cuts and bond yields have more positive sides," said a strategist at MRB Partners in a note on Friday.
Gold prices have weathered higher macroeconomic headwinds perfectly that began in October last year and intensified in mid-February against a backdrop of broadly flat US real interest rates and a stable US dollar, added strategists.
However, in recent weeks, the dollar and bond yields, especially real yields, two dominant gold cycle drivers, have risen and risen, paving the way for higher ground for the precious metal.
The surge in yields follows a number of hawkish statements from Federal Reserve officials including Chair Jerome Powell, who earlier this week suggested that recent inflation surprises had knocked the Fed's confidence to begin cutting rates.
Traders now see the first Fed rate cut in September rather than June, with just two rate cuts expected for this year, down from six or seven previously forecasted, and fewer than three cuts for 2024 projected by the Fed at its March meeting.
However, gold has appreciated despite a backdrop of higher yields and a stronger dollar, but is now "quite overbought," strategists cautioned. The resilience of the precious metal is likely explained by ongoing momentum as well as a surge in demand for safe-haven assets following increased geopolitical tensions.
Gold's strength appears to "reflect momentum rather than specific performance drivers," said MRB Partners.
However, a significant gap in gold hedge protection may not emerge until central banks withdraw the excess liquidity flowing into the market.
"We believe that gold will continue to be supported as long as easy money is provided by central banks," added strategists.
Long-Term Potential: Buy
Short-Term Potential: Sell
Resistance: 2400.82
Entry: 2390.52
Support: 2260.34
OIL/WTI
Technical Analysis
Previously, the prediction for Oil/WTI tended to be downward, but this decline was only temporary, and the price still has significant potential for future increases. This is primarily due to the ongoing conflict between Israel and Iran, which continues to present substantial opportunities, particularly for investors interested in Oil/WTI. The potential for increase will persist considering that the Middle East is one of the largest sources of oil globally, which is essential to note. This week also supports further increases, with the predicted range for potential increase being between 87 to 89. Based on trends, support for an increase remains, and this upward trend is forecasted for the long term. This prediction and analysis are supported by trend analysis and candlestick analysis.
Fundamental Analysis
Natural gas futures were higher in US trading on Friday. On the New York Mercantile Exchange, natural gas futures for May delivery traded at $1.75 per mmBTU at the time of writing, up 0.17%. The instrument previously traded at a high session of $ per mmBTU. Natural gas is likely to find support at $1.649 and resistance at $1.805.
The US Dollar Index Futures, which monitors the performance of the greenback against a basket of six major currencies, fell 0.01% and traded at $105.97. Meanwhile, on the Nymex, Crude Oil for May delivery rose 0.50% and traded at $83.14 per barrel, while Heating oil for May delivery rose 0.52% and traded at $2.55 per gallon.
Long-Term Potential: Buy
Short-Term Potential: Sell
Resistance: 89.74
Entry: 82.10
Support: 79.26
USDJPY
Technical Analysis:
The prediction for USD this week still shows a tendency to rise, but this increase is relatively small, and the price is expected to try to decline more compared to the increase. Additionally, the overall weakening influence is because the US is still considering assistance to Israel after Israel attacked Iran, and in the near future, Iran is predicted to retaliate against Israel, so it is necessary to pay attention to the Israel-Iran conflict. As for the Yen, it is likely to strengthen this week due to the prolonged weakening of the USD. There will be a reversal trend from Bullish to Bearish, so this needs to be noted.
Fundamental Analysis:
The prediction for this week is that the Yen will tend to strengthen after the prolonged weakening of the USD this week. The prediction for the increase in Yen is in the range of 1.25% -1.68% because this week there will be news of the "Core PCE Price Index," which is predicted to show a tendency to decline against the USD.
Long-Term Potential: Sell
Short-Term Potential: Buy
Resistance: 15.227
Entry: 154.638
Support: 151.874
EURUSD
Technical Analysis
The prediction for the Euro this week suggests a significant upward trend, as indicated by the chart showing signs of an impending rise. The candlesticks demonstrate a reluctance to decrease, implying a potential reversal in the trend from bearish to bullish. This increase is also influenced by the considerable weakening of the USD this week, which will likely lead to high and sustained inflation for the Euro. The current price trend supports the notion of an increase, while the candlestick patterns further reinforce the reversal from bearish to bullish. However, concerns arise due to the Euro government's prioritization of support for Europe-Russia conflict over domestic economic issues, potentially leading to sustained high increases. Although there are no immediate reports, there's a possibility of further US aid to Ukraine for potential conflict with Russia.
Fundamental Analysis
The potential for an increase in the Euro this week is predicted to be between 0.51% to 0.78%. This upward potential is expected to persist, warranting attention. There's a likelihood of weakening against the USD, further enhancing the potential for the Euro's rise. Additionally, many Eurozone citizens are currently grappling with economic difficulties, leading to a worsening cost-of-living crisis and increased household debt. Some households have missed three or more credit or bill payments in the last six months.
Long-Term Potential: Buy
Short-Term Potential: Sell
Resistance: 1.09744
Entry: 1.06558
Support: 1.06025
NASDAQ
Technical Analysis
The prediction for the Nasdaq Index tends to indicate a decline, consistent with previous weeks' forecasts, despite some slight increases. This is because the influence of prices is no longer strong enough for further rises, and there is potential for a decline in the Nasdaq Index. The cause of this decline will likely be prolonged, influenced by the level of trust in the USD government and the relatively high inflation. The Nasdaq index also has the potential to decline according to the appearance on the chart. There will likely be a trend change from a bullish to a bearish trendline, which also needs to be noted.
Fundamental Analysis
The prediction for the Nasdaq Index is expected to continue declining this week, ranging from 1.1% to 2.38%. This decline is still influenced by the high inflation and investor doubts, possibly due to signs of a third world war. It is also predicted to decline significantly.
Long-Term Potential: Sell
Short-Term Potential: Buy
Resistance: 18715
Entry: 17178
Support: 16078
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