The consumer price index (CPI) announced last month that 0.1% were risen, lower than the 0.4% in February. The overall inflation rate fell more than expected. The data suggested that the world's largest economy may be headed for recession. 

The latest U.S. initial jobless claims rose slightly to 245,000. After the release of the data, there were two waves of huge funds that pushed the price of gold up rapidly. COMEX’s most active gold futures contract traded more than 2,300 lots within one minute at 20:30 Beijing time on 20 April. At 20:33, more than 2,100 lots were traded within one minute. It is conceivable that if the Federal Reserve starts to keep interest rates unchanged in June, the gold bulls will inevitably launch. At present, the market expects that the rate hike of 25 basis points in May will be the last rate hike. The Fed will keep interest rates unchanged for the rest of 2023, which will put more downward pressure on the US dollar. At that time, gold is very likely to take the opportunity to attack higher levels, but the fact remains to be further observed the changes in the US economic data and the attitude of the Federal Reserve.

Judging from the current trend, gold has already reached the target of 2,000 mentioned in the article last month on the daily chart, and then profit-taking occurred below USD2,000. At present, 1,950 is an important support level below. Investors who are interested in doing more can pay attention to this area. However, gold has repeatedly tested the 1,980 - 1,990 area and found support (it once tested the support of the USD1,970 level), and rebounded quickly. The price has been running on the track of this support zone, and the overall price is still fluctuating. 

It can be seen from the 4-hour chart that gold is still in an upward channel. If there is a downward breakthrough channel, attention should be paid to whether it will have the power to pull up quickly. If so, it can become a buying point for gold bulls. The target is to see USD2,000 first. If it breaks upwards, the target can reach the previous top of USD2,047 or even higher. The gold is mainly focused on bulls, and it will not be too easy to go short against the trend. Before the interest rate meeting of Federal Reserve in May, a new high in the market outlook will become a reality if gold can still remain above USD1,950 after the shock.

Hugo Leong

Gold Analyst of Hantec Group