Gold tells everything
"When the government fears gold… you know that the currency is in danger."
Robert Kiyosaki
Every time people think the markets are safe, gold appears as a silent warning, not moving because it’s a beautiful metal or rising just because it’s a safe haven, but because it reflects something deeper than just a price movement linked to the dollar; it reflects market fears, currency weakness, interest rate turmoil, and declining confidence.
The problem is that most people look at gold as a price on the chart, while the truth is that gold reads what’s behind the price, so gold analysis is not a simple question: should we buy or sell? But a bigger question: what is gold trying to tell us about the economy before everyone understands?
Latest news and their impact on the price
"War doesn’t end with the last bullet… but with the last bill paid."
John Maynard Keynes
To this moment, the effects of the war between Iran and the United States are expanding more deeply on the economic scale, making markets a locomotive on two completely opposite poles. As the war expands, oil prices rise, putting pressure on the metals market where gold is sold to cover stock positions that declined due to falling yields from rising oil. Meanwhile, the end of the war means markets will reprice themselves based on the underlying economic risks caused by internal distortions in US economies, such as declining confidence in the dollar, increasing US debt, and issues related to tariffs and their repercussions.
Economic analysis
"Government money always ends up corrupting when it’s not limited by something outside its will."
Friedrich Hayek
The numbers tell a clear story:
Inflation has risen, growth is strong, and unemployment has not risen in a way that frightens the Federal Reserve.
This means there is no enough pressure forcing the Fed to cut rates quickly; rather, the numbers are pushing the Fed toward holding rates steady, and we won’t see a cut or plans to cut before inflation drops below 2%.
At the same time, bond yields are rising, especially long-term yields, which indicates the market is still worried about inflation lasting longer.
Similarly, Jerome Powell’s recent speech was along the same lines:
He said inflation is still present, the economy remains solid, and the Fed will not rush to cut rates until clearer data is available.
This initial picture reflects on gold.
Gold doesn’t like high interest rates because high rates make bonds and the dollar more attractive, which puts short-term pressure on gold prices.
Jerome Powell’s statement in his recent speech that he will remain on the Federal Reserve Board despite the new president’s arrival and his stance has increased near-term uncertainty. This uncertainty leans more toward downside than upside because Powell’s influence on the Fed remains greater than that of the new president, given his significant role in the economy and its impact.
And I want you to know that the arrival of a new president does not necessarily mean a rate cut. Many Federal Reserve chairs in US history promised the president to cut rates upon taking office but did not. The most famous is William McChesney Martin, who became Fed Chair in 1951 after being nominated by President Harry Truman on the condition that he would cut rates, but he did not, and Truman later called him a traitor.
All of the above puts pressure on gold in the short term, but considering the bigger factors (weak dollar confidence, US debt crisis), all these effects are light and temporary.
In short, a rate cut is coming but not before a collapse in oil prices forces the Fed to make a significant cut and inject more liquidity to prevent a severe recession. This scenario holds a bright future for gold, considering the major factors (weak dollar confidence, US debt crisis). The idea of debating a rate cut based on indicators is just volatility that might cause gold to correct, nothing more.
Technical price analysis
"Economics has no value without statistics."
Dr. Saleh
Looking technically at gold prices:
1. Statistically, gold has a 3% chance to test the 4500–4300 level.
2. Statistically, May is characterized by sideways trading.
3. According to Elliott, the price will complete the fourth wave with a test of 4500–4300 and then start the fifth wave.
4. The price reflects a continuation flag pattern with its conditions met, mainly the presence of volume in the flag.
5. Positivity for the flag is confirmed by breaking 4650 and testing it multiple times.
6. The gold range expands to $250 (any movement within this range is not explained by statistics or technical analysis).
7. The fifth Elliott wave ends at 5500–6000.
8. There is high volume at 4720.
Summary:
I expect the price to retest 4500 and form a long wick reaching 4300 (but traditional markets will not reflect this price). It will trade sideways between 4550–4720 for a period, and in the long term, gold is preparing to target 5500, provided it breaks 4720.
Financial advisor’s opinion
At first glance, gold might seem just a commodity priced in dollars, but upon closer inspection, you’ll find it reflects the strength of the dollar. And if you look even deeper, you’ll see that all markets, including their economic problems, political issues, participant fears, and greed for profit, are embedded in the gold price. That’s why I see gold as a mirror of all markets, and analyzing it is important for every investor or businessman regardless of the type of investment.