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·       Gold prices inched up on Wednesday, hovering near a four-month high on a weaker dollar, while investors awaited minutes from the U.S. Federal Reserve’s last policy meeting as inflation worries persist.

 

·       Spot gold was up 0.1% at $1,870 per ounce by 0044 GMT, after hitting its highest since Jan. 29 at $1,874.80 in the previous session.

·       U.S. gold futures rose 0.1% to $1,869.60 per ounce.

·       The dollar index held close to a near three-month low against its rivals, making gold less expensive for other currency holders.

·       Market participants are waiting for the release of minutes from the U.S. Fed’s April 27-28 policy meeting at 1800 GMT for further clarity on economic recovery and policymakers’ view on inflation.

·       Data on Tuesday showed U.S. homebuilding fell more than expected in April, likely pulled down by soaring prices for lumber and other materials.

·       Concerns over rising inflation intensified as U.S. consumer prices rose 4.2% in April from a year earlier, the fastest increase in more than a decade.

·       The U.S. central bank has pledged to keep interest rates low until the economy reaches full employment and Fed officials have repeatedly maintained they expect any rise in inflation to be short-lived.

·       World powers, including the United States, urged a truce in the conflict as Israel bombarded Gaza with air strikes and Palestinian militants resumed cross-border rocket fire on Tuesday.

·         Gold: Strong buy signal targeting 1868 and 1875

Gold Spot beats important 200 day moving average resistance at 1844/46 for a buy signal. (After the break, prices kindly dipped back to this level for a buying opportunity). Holding above the 9 month trend line at 1860/62 is yet another buy signal. (We bottomed exactly here on the pull back yesterday).

Gold Daily analysis

Gold now holding support at the 9 month trend line at 1861/59 today, for a strong buy signal targeting 1868 & 1875. We topped exactly here & this is now the main challenge for bulls. A break above 1881 targets 1885 & 1890, eventually as far as 1920/25.

First support at 1861/59. Unlikely, but further losses meet a buying opportunity at 1846/44, stop below 1840.

Silver Daily analysis

Silver Spot topped exactly at first resistance at 2875.

Silver topped exactly at first resistance at 2875 but above here can target 2905/10 & 2970/80.

Downside is expected to be limited with support at 2820/10. Below 2790 risks a slide to 2775/70 & 2740/30.

·         Gold Price Forecast – Sideways Trading In-Play, FOMC Meeting Minutes!

Gold – XAU/USD – Daily Support and Resistance

S3 1845.44

S2 1857.31

S1 1863.26

Pivot Point 1869.19

R1 1875.14

R2 1881.06

R3 1892.94

On the technical front, GOLD is trading strongly bullish at 1,870 level. On the higher side, gold is likely to face resistance at 1,876 level and support at 1,864. The 4-hour timeframe has closed an upward channel supporting bullish bias and suggesting increasing bullish trend continuation. The indicators like RSI and MACD support a bullish trend. Therefore, we should consider taking a buying trade over 1,865 level and selling trade below the same. Good luck!

 

·         Spot gold may fall into $1,830-$1,847 range

Spot gold may break a support at $1,859 and fall into a range of $1,830-$1,847 per ounce, as it failed to break a key resistance at $1,875.

The rise over the past few days looks too sharp to sustain. It is subject to a correction. The failure to break $1,875 could be the very first signal that the correction has started.

A five-wave cycle from $1,788.81 may have completed around $1,875, increasing the chance of a drop. A break above $1,875 could lead to a gain to $1,893.

On the daily chart, the metal is struggling around a similar resistance at $1,874, which may trigger a pullback towards the falling trendline.

Over the next few days, the metal may consolidate around $1,874.

A break above $1,874, which looks unlikely by the end of this week, may open the way towards $1,921-$1,979 range.

 

Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses.

 

 

·         Federal Reserve FOMC Minutes due Wednesday 19 May 2021 - preview

For the Federal Open Market Committee meeting in April (28th), due at 1800GMT

Fed Chair Powell was fairly abrupt in his press conference for this meeting on the subject of whether tapering was discussed:

"no, we've said we would talk well in advance and it is not yet time to do so."

The minutes will be scoured for signs that there may have been at least some discussion. Or maybe a discussion of when there should be a discussion. While Fed Dallas head Kaplan does not have a vote on the FOMC this year he does have a voice in deliberations and it'd be surprising if he said nothing at all on taper talk timing. We'll see.

In the meantime, inflation and jobs numbers will have been topics - these are the two twin signs the Fed is monitoring.

 

·       Palladium gained 0.2% to $2,907.09 per ounce, silver eased 0.2% to $28.15, while platinum edged 0.2% higher to $1,220.50.

 

·       Surging lumber prices weigh on U.S. homebuilding

U.S. homebuilding fell more than expected in April, likely pulled down by soaring prices for lumber and other materials, but construction remains supported by an acute shortage of previously owned homes on the market.

·       U.S. vaccinated 600,000 12-15-year olds last week -health official

·       New York Governor Cuomo's COVID-19 book deal was worth over $5 million

New York Governor Andrew Cuomo's contract with publishers for his book about dealing with the COVID-19 pandemic was worth over $5 million, according to tax documents released by his office to the media on Monday.

Cuomo was initially lauded for his handling of a crippling coronavirus outbreak in New York, but praise turned to blame when media reported allegations of misconduct, including the under-reporting of nursing home deaths.

 

·       UK ministers considering contingency plans for local lockdowns -the Times

British ministers are considering contingency plans for local lockdowns or a delay to reopening after June 21 in response to concern about the spread of the coronavirus variant first detected in India, The Times newspaper reported on Monday.

 

·       UK PM Johnson: No conclusive evidence to delay reopening yet

 

·       UK inflation more than doubles to 1.5% in April

British consumer price inflation more than doubled in April at the start of what the Bank of England hopes will be a temporary surge as the economy recovers from last year’s COVID slump.

Consumer prices rose by 1.5% in April, the Office for National Statistics said, following a 0.7% rise in March.

A Reuters poll of economists had pointed to an increase of 1.4%.

 

·       Italy shortens COVID curfew, eases other restrictions

Italy's government on Monday approved a decree pushing back with immediate effect a nightly coronavirus curfew to 11 p.m. from 10 p.m. and easing other curbs in the regions where infections are low.

Prime Minister Mario Draghi's government agreed the curfew would begin at midnight from June 7 and be abolished altogether from June 21 in those areas, a statement said, in line with a plan to gradually relax restrictions across the country.

·       India reports 267,334 new coronavirus infections

·       Finnish parliament backs EU recovery plan

Finland's parliament on Tuesday voted in favour of the European Union's 750 billion euro ($916 billion) COVID-19 recovery plan, according to an official tally.

The legislation, which had required support from at least two thirds of votes cast, was passed with 134 members of parliament voting in favour, 57 against and eight abstentions.

 

·       PM Modi’s rating falls as India reels from COVID-19 second wave

·       Most Japanese medical workers still not fully vaccinated as Olympics loom

Less than 30% of Japan’s medics have been vaccinated against COVID-19 in major cities with just 65 days to go before the start of the Tokyo Olympics, the Nikkei newspaper reported on Wednesday, amid growing calls for the Games to be cancelled.

·       Taiwan gets 400,000-dose vaccine boost as COVID cases rise

·       Vietnam shuts industrial parks housing Foxconn plants after COVID-19 outbreak

Vietnam's northern province of Bac Giang ordered on Tuesday four industrial parks, including three that house production facilities of Taiwan's Foxconn (2317.TW), to temporarily shut down due to an outbreak of COVID-19.

 

·       South Korea's Moon seeks urgency on N.Korea, vaccine deal at Biden summit

South Korean President Moon Jae-in is hoping to use his first summit with U.S. President Joe Biden this week to revive long-stalled talks with North Korea and urge the White House to embrace the issue with more urgency.

South Korean officials say they were heartened by the new administration's recent policy review, which called for a focus on practical diplomatic steps to reduce tensions while maintaining the final goal of removing North Korea's nuclear weapons.

 

·       Australian PM says trade volumes show China values bilateral relationship

China is Australia's largest trading partner. In the 12 months to March, Australia exported A$149 billion ($116 billion) worth of goods to China, down 0.6% from the previous year. Exports, however, have been supported by strong prices for iron ore, the largest single item in trade with China.

·       China says U.S. threatening peace as warship transits Taiwan Strait

China accused the United States on Wednesday of threatening the peace and stability of the Taiwan Strait after a U.S. warship again sailed through the sensitive waterway that separates Taiwan from its giant neighbour.

The U.S. Navy's 7th Fleet said the Arleigh Burke-class guided missile destroyer USS Curtis Wilbur conducted a "routine Taiwan Strait transit" on Tuesday in accordance with international law.

·       Human rights activists urge athletes to boycott Beijing Games