Weekly Forecast: Gold, Nasdaq 100, EUR/USD, and Silver
Adapted from the original article by Nick Cawley on Forex Factory.
A pivotal week lies ahead as financial markets brace for major events that could reshape sentiment and pricing across key asset classes. With the Federal Reserve’s interest rate decision on deck and crucial inflation data due, investors will be navigating an intricate landscape marked by uncertainty and anticipation. This forecast provides a detailed outlook for gold, the Nasdaq 100, EUR/USD, and silver, analyzing their respective reactions to recent developments and speculating on how they might perform through the coming week.
Overview of Key Market Drivers
The upcoming week holds particular importance due to several high-impact macroeconomic events:
– The Federal Open Market Committee (FOMC) policy decision is scheduled for Wednesday.
– Prior to that, the May Consumer Price Index (CPI) data will be released on Tuesday.
– Recent U.S. nonfarm payrolls exceeded expectations, complicating the Fed’s potential policy stance.
– The European Central Bank recently cut rates but hinted it might not accelerate the rate-cut cycle.
– Precious metals like gold and silver face volatility due to real yields, rate expectations, and U.S. dollar strength.
– Equities are affected by earnings momentum, rate outlooks, and inflation expectations.
Each of these events carries significant weight for market direction, particularly for the assets covered in this article.
Gold (XAU/USD) Outlook
Gold prices experienced a pullback last week after reaching an all-time high above $2,450 per ounce in May. The current state of the market suggests gold is finding support levels, yet remains sensitive to upcoming data releases and policy guidance from the Fed.
– Current price support sits at $2,280, near the 38.2% Fibonacci retracement level from the March-May rally.
– The break below the 20-day simple moving average (SMA) signals waning momentum, while the lack of a decisive move lower points to potential consolidation.
– The upcoming U.S. inflation data and Fed guidance will be critical in determining whether gold resumes its uptrend or sees deeper correction.
– Market participants are split on the Fed’s tone, with some expecting a more dovish stance despite the strong labor market.
– Real yields and the U.S. dollar remain headwinds. If inflation cools and Fed signals easing, gold may rebound.
What to Watch:
– Tuesday’s CPI reading: Lower-than-expected inflation would likely trigger renewed buying in gold.
– Wednesday’s FOMC statement: Any signal toward future rate cuts would reduce real yields and benefit gold.
– $2,280 and $2,250 are key support levels; a break below may lead to further declines.
– Resistance near $2,360 needs to be reclaimed for bulls to regain confidence.
Forecast: Neutral to Slightly Bearish Near-Term, Bullish Medium-Term
Gold remains within a broad bullish trend technically, but short-term risks exist. If CPI softens and the Fed hints at policy easing, gold could find renewed strength.
Nasdaq 100 (NDX) Analysis
The Nasdaq 100 index remains strong, driven largely by its technology-heavy composition and gains in AI-related stocks. Yet, last week’s action showed some signs of consolidation, with the index struggling to decisively break above the previous highs.
– The Nasdaq 100 is hovering near record levels, supported by megacap tech companies.
– The most recent nonfarm payrolls report temporarily cooled bullish sentiment, as it strengthened the argument for the Fed to delay rate cuts.
– Market breadth remains narrow, with a small group of stocks driving the bulk of gains such as Nvidia, Apple, and Microsoft.
– The RSI (Relative Strength Index) suggests the index is not yet overbought but is approaching key technical levels.
– Support lies at 18,500, which aligns with the 20-day SMA, while further resistance is near 19,000.
Investor Sentiment
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