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Gold (XAU/USD) Technical Analysis: Gold Price Halts its Gains

On the other hand, over the same period, expectations for the $2000 top will be important if the bulls return prices toward the $1985 resistance again. 

For four consecutive trading sessions, the price of XAU/USD (gold) tended to the downside, with losses affecting the support level of 1944 dollars an ounce, before settling around the level of 1962 dollars an ounce at the time of writing the analysis, awaiting the reaction of the US dollar on the important and influential US economic data package. Today, the growth rate of the US economy, and tomorrow the reading The US Federal Reserve's favorite measure of inflation in the country.

With banking concerns subsiding for the time being, with no more stress emerging in the system, investors' appetite for more risk is returning. Consumer confidence in the US has not been hit hard, despite the ferocious pace of the bank run. The Conference Board's consumer confidence index rose to a reading of 104.2 in March from a reading of 103.4 in February, beating expectations.

A lower unemployment rate and a proliferation of job vacancies are likely to keep the mood more buoyant, with bigger ticket items such as cars and refrigerators on shopping lists. However, with an eye on higher interest rates for a longer period, many consumers are planning to cut back on discretionary spending on checkout. With consumer resilience shining again, there is growing speculation that the Fed may raise US interest rates again at the next meeting, but it is still believed to be close to the top of peak rates, especially since bank lending is expected to contract, causing a burden. on the economy.

Alibaba's planned hyper-division into six separate divisions has lifted China's technology sector, helping to sweep a wave of positivity through the markets. Other big Chinese tech giants are expected to make similar moves, helping to unlock more value, and matching authorities' demands for greater competition as the antitrust campaign intensifies.

Expectations of rising energy demand in China are helping to keep oil prices higher again, with Brent crude hovering below $79 a barrel. Prices were also boosted by a larger-than-expected drop in US crude inventories, which fell by 6.1 million barrels last week.

US stocks advanced as risk appetite continued to recover from turmoil in the banking sector, led by gains in technology and financial stocks. So, the Nasdaq 100-heavy technology index has entered a bull market, up 20 percent from its December low. And the S&P 500 is again running above the top of the 4,000, with 92 percent of components finishing higher — the first time that has happened in 2023, according to Susquehanna. Meanwhile, the Cboe's Volatility Index closed at a three-week low.

US Treasury yields were little changed, and the US dollar strengthened as investors digested recent comments from Fed officials and looked to core PCE data for clues about how the Fed might change course for US interest rates after turmoil in the financial sector raised market expectations. Financial stocks were hit hard by the collapse of three US banks this month, but managed to rebound on Wednesday, even after a report the Federal Deposit Insurance Corporation was weighing pressure on major banks to help cover nearly $23 billion in costs from bank failures.

Federal Reserve Chairman Jerome Powell signaled Fed officials' expectations for another quarter-percentage-point increase this year when lawmakers asked him yesterday when the central bank would stop raising interest rates, Bloomberg News reported. However, traders are pricing in approximately a 50-50 probability that this move will occur at the next Federal Reserve meeting in May.

Gold Technical Outlook:

Despite the recent performance, the XAU/USD (gold) price is still in an ascending trend range, and no actual reversal of the trend will occur, according to the performance on the daily chart below, without the price moving toward the support levels of 1920 and 18850 dollars, respectively.

On the other hand, over the same period, expectations for the $2000 top will be important if the bulls return prices toward the $1985 resistance again. The gold price will remain in anticipation of the US dollar's reaction today to the announcement of the US economic growth reading and the number of jobless claims, and tomorrow the US Federal Reserve's preferred inflation reading.


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Adam Lemon
About Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.


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