With Donald Trump seeking to mediate the conflict between Russia and Ukraine and announcing a tariff pause, the traditional market experienced a slight downturn, contributing to a natural decline in gold prices.
With a downturn already reaching 2000 points, will it drop another 1000 points to hit $3200 this week?
In this article, we’ll examine potential XAUUSD gold price predictions for the period from April 28th to May 2nd and highlight key buying and selling zones.
Key Economic Events of This Week
Several significant U.S. economic reports are scheduled for release this week, which may greatly impact XAUUSD.
- Tuesday: A rise in job openings could indicate a strong labor market, potentially driving gold prices lower and strengthening the USD. Conversely, fewer openings may signal a slowing economy, which would benefit gold.
- Wednesday:
- Advance GDP q/q & GDP m/m: These metrics are vital indicators of economic growth. A strong GDP report could cause the Fed to consider holding or increasing rates, which would be negative for gold.
- Employment Cost Index (ECI): If concerns about persistent inflation arise, an increase in employment costs might lead to heightened safe-haven gold purchases.
- Thursday:
- ISM Manufacturing PMI: A disappointing outcome could lower the chances of a Fed rate hike, favoring gold.
- Unemployment claims: A high number suggests a sluggish labor market, potentially prompting a Fed pause and bullish trends for gold.
- Friday: Gold prices will largely react to this week’s news. Strong employment data may exert downward pressure on gold, while signs of a weak labor market or slow wage growth could trigger a surge in gold prices.
The War in the East
As the conflict between Russia and Ukraine persists, tensions are rising between Pakistan and India, particularly along their shared border, following the tragic killing of 26 unarmed individuals in Indian-occupied Kashmir.
This situation may elevate gold prices, especially considering that Indian households collectively possess 25,000 tonnes of gold, surpassing the holdings of the top 10 central banks combined.
Such factors could indicate that the bullish trend in gold may continue.
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Gold HTF Overview
From a fundamental perspective, gold remains bullish; however, technical indicators suggest a more significant retracement could occur before gold resumes its upward path.
The weekly timeframe for gold closed with a bearish candlestick pattern. While this pattern did not engulf the prior weekly candle, some retracement is still anticipated based on this signal.
Moreover, drawing a Fibonacci retracement from the start of this bullish rally to $3500 indicates that last week, the price tested the 0.236 Fibonacci level and bounced back, setting the next significant level at 0.382, which corresponds to 3154.78.
Gold Forecast for April 28th to May 2nd
With gold finally undergoing a decent retracement, we can expect it to reach favorable buying levels where buy-side liquidity is available. The 4-hour timeframe serves as an effective gauge for this.
The primary support level on the 4-hour chart is between $3247 and $3193. Additionally, the Point of Control (POC) level is located at $3226, which may play a critical role in halting bearish movements in gold. This level is projected to be tested this week, potentially providing a bounce in the range of 200 to 500 points.
If gold opts to continue downward and achieve a deeper correction, we anticipate a crucial level around $3165 to $3124, where a 4-hour breaker block and Fair Value Gaps (FVG) are present. The value area high for this swing is also at $3124. A drop below $3124 could see gold moving towards $3009, emphasizing the importance of this zone for bullish traders.
Now, let’s identify the selling levels for gold. The initial selling zone begins at $3342 and extends to $3353. This zone will gain traction if $3260 is breached on the 1-hour chart and the price closes below it. The bearish order block between $3342 and $3353 will then become a high-probability area for entering short positions on gold.
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Trading Strategies & Investment Recommendations
In conclusion, the optimal strategy for trading gold is to seek buying opportunities at higher time frame levels and pursue selling opportunities at lower time frame levels. Ensure you mark these levels on your charts for improved trading guidance.
Support Levels
- $3245 – 4-hour breaker block
- $3165 – 4-hour FVG and breaker block
Resistance Levels
- $3342-3353 – 1-hour OB and FVG
To summarize, gold remains fundamentally bullish despite some short-term bearish pressures. Key support levels at $3245 and $3165 offer promising buying opportunities, while resistance around $3342–$3353 presents short-term selling setups. Traders should stay agile and informed on key economic events this week to capitalize on gold’s upcoming significant movements.
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