Gold almost hit 2450 in May. After breaking 2075, gold surged nonstop for months. Demand from China and central banks has been the main catalyst so far. However, the momentum is slowing every day. Even the latest top at 2450 was only $20 above the previous high. Gold traders are on edge with the incoming busy economic calendar. This week, GDP and PCE data will be in the spotlight, followed by next week’s jobs report, leading up to the key June FOMC meeting in the middle of June when forecasts will be updated.
(XAUUSD Hourly Chart)
Gold broke the rising trendline from the end of February. After hitting almost 2450 and staying above 2400 for a few days, XAUUSD retreated quickly, ending the 3-month trend. This is a significant change for the medium term. If the current momentum extends after this week’s GDP and PCE data, the main support to follow will be the 2272-2282 zone.
(XAUUSD Hourly Chart – Zoomed In)
Looking more closely, the price seems to be contracting, and the decision time is approaching. The 2350 and 2320 levels will be the main points to follow this week. In the event of a downward break, the 2272-2282 zone will be the next target, and this zone will likely determine the medium-term direction of gold. However, a breakout above 2350 might signal tough times for gold traders because the recent weeks’ whipsaw action will probably continue.
