Gold: forecast for May 23-29
Technical advantage of the gold bulls is clearly fading these days: the price tested the levels below $1245 this week. The yellow metal has found some support at the 55-day moving average, but the bearish pressure is prevailing in a broader view. Increased expectations of the Fed’s rate hike in June has put downward pressure on many commodity assets. However, risk appetite was taken away after the air crash of the plain heading to Egypt.
Technically, price remains in a bearish channel since early May and jumped from the trend support, forming a long-legged candle. We see space for a technical correction towards $1270 per ounce next week, but in the current conditions the upside of gold is unlikely to be sustainable.