CMX Gold: US Economy Is Expected to Fall into Recession

Summary:

The sharp decline in the forecast has raised a question about how flexible the global economy will be to further negative shocks. As the global economic growth rate falls, economic activities will become more fragile and fall into a self-fulfilling negative cycle, which will lead to a further sharp economic slowdown." The US economy is stalling at a slower rate than in the past because potential growth rates have been declining since the global financial crisis. The U.S. economy is expected to stall at a rate of 0.75% to 1.25%.

BUY XAUUSD

Close Time

CLOSED

1702.80

Entry Price

1709.10

1698.80

4015.90 -8.44 -0.21%

40.0

Pips

Loss

1698.80

Exit Price

1702.80

Entry Price

1709.10

Fundamentals

Citigroup said a series of supply shocks that continued to affect the global economy this year had a "surprising" impact, which will trigger a slowdown in GDP growth, thus leading to a recession in the US, exacerbating the possibility of a global economic downturn.

"In any case, the US economy looks set to fall below its 'stall speed' in the second half of this year, which supports our expectations of a recession in 2023." Robert Sockin and other Citigroup economists wrote in a report on Tuesday that "in terms of the global economy, our forecast is that the economic growth rate will hover around the stall speed in the next few quarters."

Citi said that the continuing impact of the COVID-19 pandemic and the soaring commodity prices caused by Russia's invasion of Ukraine had exacerbated the inflationary pressure, and central banks were struggling to contain inflation through tightening actions, resulting in a downward revision of the global economic growth forecast.

"The sharp decline in the forecast has raised a question about how flexible the global economy will be to further negative shocks. As the global economic growth rate falls, economic activities will become more fragile and fall into a self-fulfilling negative cycle, which will lead to a further sharp economic slowdown."

The US economy is stalling at a slower rate than in the past because potential growth rates have been declining since the global financial crisis. The U.S. economy is expected to stall at a rate of 0.75% to 1.25%.

Technical Analysis

2.1 CMX Gold 1D Chart

The price broke along the downtrend line since August 11, 2022, with key resistance above at 1727.5.

2.2 CMX Gold 4H Chart

The above SMA constitutes the key pressure at 1720.

2.3 CMX Gold 1H Chart

The key resistances above are 1716.8 and 1720.

CMX Gold: US Economy Is Expected to Fall into Recession_4

For CMX gold, it is recommended to go long at the lows.

Entry price: 1702.80;

Take profit: 1705.45, 1709.10;

Stop loss: 1698.80.

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