Fundamental Analysis

• Gold Approaches Record Highs, Closes Above 2400USD for the First Time
• Precious metals are rising across the board, with copper nearing its all-time high.
• Silver also hits an 11-year high, potentially contributing to cost-push inflation.

XAUUSD technical analysis

Analyzing the daily chart of gold, we see a general uptrend in precious metals, with notable increases in copper and silver. Gold is also rising towards new highs, with the recent high at 2430USD. If it breaks above 2430USD, the next target would be 2500USD.

However, the 50% line of the Fibonacci fan is just above, indicating a potential adjustment before surpassing the 2400USD range. Breaking 2430USD is crucial. If it breaks above, it would confirm an uptrend according to Dow Theory.

Analyzing the RSI, it shows a breakout from the descending trendline, indicating potential for further rise, suggesting a high probability of new highs.

Day trading strategy (1 hour)

Looking at the 1-hour chart of gold, it forms an upward trend along the Fibonacci channel. However, recent upper wicks indicate resistance at higher levels.

The overlapping of the 28 and 52 moving averages, followed by an upward break, is noteworthy. Despite some adjustments, the upward trend is expected to continue.

The early morning remarks from an FRB member mentioning rate hikes might have some impact, but since FRB Chair Powell has denied rate hikes, it is expected to become a buying opportunity soon.

For day trading, buying around 2405USD, exiting around 2420USD, and setting a stop at below 2400USD is advisable. Focus on buying on dips.

Support/Resistance lines

Consider the following support and resistance lines going forward:

2430USD – Recent high

2405USD – Monthly support line

Market Sentiment

XAUUSD: Sell: 62% Buy: 38%

Featured Currency Pair of the Week (CHFJPY)

CHFJPY rebounded slightly after a sharp drop on May 15, but the recovery is slow. Switzerland implemented its first rate cut in nine years in March, taking a step ahead among developed countries, narrowing the interest rate gap with Japan. Consequently, the yen depreciation is not as significant as in other cross-yen pairs.

The volatility of CHFJPY is not particularly high. Currently, the 28-day moving average acts as a support line. 171.50JPY is the upper limit of the range and a major resistance line.

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*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.