GLD ETF is holding on to its gains from last week as the market continues to be cautiously bullish. Gold price fell in the early session of Monday as positive sentiments on the market offset Fed’s rate-cut optimism. The gold derivative hovered just below $313, a steady resistance.
Investors will be looking for clarity from the Fed on its next moves based on key events scheduled in the coming week. The US CPI, the deadline for the US-China trade truce and the talks about a ceasefire between Russia and Ukraine are all expected to have an impact on the demand and position of the US Dollar.
Investors seek clarification on fundamentals as they assess the GLD ETF
Gold’s historical rally has been driven by geopolitical tensions, and the fear of Trump’s aggressive trade tariffs. The price of gold has risen by 27% in the past year. It has also remained above the psychologically important zone of $3,000 per ounce ever since Trump’s announcement of universal tariffs at least 10% in early April. Investors sought safety in gold and other assets that are considered safe havens.
Investors are interested in the Russia-Ukraine peace talks that will be held on Friday in Alaska. Ukraine, however, has said that it will reject any peace agreement that requires the country to cede land to Russia. Howard Lutnick, US Commerce Secretary said that the US-China Tariff truce, whose expiration date is Tuesday 12th August, may be extended by 90 days.
The optimism in two recent diplomatic disputes has increased the level of risk, while decreasing the desire for safety. The fear and greed index is down from the extreme greed levels of last month, which was 75. It has also improved from the greed levels of last week of 56.
Investors remain cautious, however, ahead of Tuesday’s release of US CPI figures. The core CPI is expected to rise by 0.3%, a larger increase than the 0.2% that was recorded in the preceding month.
These figures can provide clues as to what the Fed will do in the coming months. In the current market environment, the Fed is trying to find a balance between the risk of an inflation rate that exceeds its target and a slowing labor market. The non-yielding bullion is being supported by the increased bets that the Fed will cut rates as early as September.
GLD ETF Technical Analysis
GLD ended the last week with a strong performance, maintaining the gains made throughout the entire week. The asset’s daily chart indicates that it is holding above its 25- and 50 day EMAs. This signals further gains for the upcoming sessions.
The ETF traded at $313.05 at the time this article was written, with bulls trying to overcome the resistance of $313.93. With an RSI reading of 57, and fundamentals that indicate a waiting-and-see attitude, the GLD gold exchange traded fund may trade within a narrow range between $309.03 and $313.93 for the immediate future. A surge in safe-haven buying could lead to a break out of the $316.18 upper resistance level.
The post GLD ETF prepares for breakout during event-packed Week may change as new information unfolds
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