- On Friday, XAU/USD gold price continued its gains to a new 11-month high at around $1987 an ounce.
- This is with a daily profit rate of 3.47%, the highest for prices in a year, and closed the trading of the exciting week around those gains.
- The gains of the gold market came after the last round of US data.
According to the economic analysis, the XAU/USD gold price appears to be benefiting from the latest round of US data. On Friday, Michigan's preliminary US consumer confidence index for March missed the expected reading of 67 with a reading of 63.4. The 5-year UoM preliminary consumer forecast for March registered a change of 2.8%, compared to 2.9% in the previous update.
Prior to that, last week US Initial Jobless Claims exceeded the expected claims count at 205K with an overall decrease of 192K. On the other hand, the Philadelphia Fed Manufacturing Survey for March had the expected reading at -14.5 with a reading of -23.2. On the other hand, US housing starts for the month of February outperformed the expected number at 1.31 million with a count of 1.45 million, while construction starts for the period topped 1.34 million with a count of 1.524 million. Earlier in the week, US retail sales missed the expected change of -0.3% with a change of -0.4%, while the Retail Sales Watch group missed forecasts of -1.2% with a change of -0.5%.
On another level affecting sentiment: Central banks and major financial institutions announced that they intend or plan to pump trillions of new liquidity into the banking system. This is in the aftermath of the collapse of three banks in one week, as the financial markets panic, which leads to a very volatile situation in the US and the global economy. This has supported gold prices.
Gold prices retreated from their highest levels after Credit Suisse agreed to accept $54 billion in liquidity from the Swiss National Bank and First Republic Bank announcing $70 billion in untapped liquidity from JPMorgan Chase and the Federal Reserve. In the end, investors cashed in on the expectation that banking would cool off. Such optimism prevailed in the global financial markets as major indices rose on Thursday. Overall, the metals market added to its rally amid mounting expectations that the Federal Reserve may cut US interest rates by 100 basis points over the next 12 months.
The gold market is generally sensitive to fluctuations in interest rates because they can affect the opportunity cost of owning the precious metal.
Technical analysis of gold prices:
In the near term and according to the performance of the hourly chart, it appears that XAU/USD gold price has recently completed an upward breach from forming an ascending channel. This indicates a significant increase in bullish market sentiment. Therefore, the bulls will look to extend the current run of gains towards $1985 or higher to $2010. On the other hand, the bears will target potential pullbacks around $1951 or lower at the $1934 support.
On the long term and according to the performance on the daily chart, it appears that the gold price XAU / USD is trading within forming a sharp bullish channel. This indicates a strong long-term bullish bias in market sentiment. Therefore, the bulls will be looking to ride the current rally towards the $2022 resistance or higher to the $2071 resistance. On the other hand, long-term profits will be targeted by bears at around $1,916 or below at the $1,866 support.
The price of gold is on its way to another exciting trading week, where financial markets and investors will interact strongly with the decisions of global central banks led by the US Federal Reserve and developments about the performance of global banks after the recent US and European collapses.
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