Gold Price Forecast: XAU/USD stuck between $1890-$1850, awaits a range breakout
Premium|Take advantage of 50% OFF on your first month.
Start your subscription and get access to all our original articles.
You have reached your limit of 5 free articles for this month.
Get all exclusive analysis, access our analysis and get Gold and signals alerts
Elevate your trading Journey.
UPGRADE- Gold stuck in an $1890-1850 range after Monday’s 5% slump.
- Traders divided between rising covid infections, vaccine optimism.
- Four-hour chart warrants caution while below $1900 mark.
Gold’s (XAU/USD) posted a green candle on Thursday, having risen 0.60% to finish around $1875. Despite the uptick, the bright metal remained trapped in its recent range between $1890-$1850. Gold benefited from increasing concerns over the global economic recovery, in the wake of the continued rise in coronavirus, which negated the optimism over the vaccine progress. The US Treasury yields fell 10 basis points on Thursday on economic growth concerns and lifted the demand for the yieldless gold. Although the gains in the metal remained capped, as the US dollar held steady in the upper bound of this week’s range on fresh concerns over the fiscal stimulus and Wall Street tumble.
Heading into a weekly close this Friday, gold traders await a strong catalyst to break free from the range trade, as covid updates from across the globe will continue to influence the broader market sentiment and dollar flows. Also, the US Michigan Consumer Sentiment data will be closely eyed alongside reports of potential restrictions likely to be imposed in the US states.
Gold: Short-tern technical outlook
Four-hour chart
Looking at the four-hour (4H) chart, gold extends its downside consolidation phase following the 5% slump seen on Monday.
Although higher lows are seen over the past hours, the risks remain skewed to the downside, as the Relative Strength Index (RSI) remains in the bearish territory, currently at 44.55.
To the upside, the convergence of the 50, 100 and 200-4H Simple Moving Averages (SMA) around the $1900 level is the level to beat for the bulls.
The bearish bias remains intact so long as the price stays below the aforesaid critical resistance. A daily closing above the latter is needed to negate the downside bias.
Alternatively, a breach of the rising trendline support at $1863 and a subsequent daily closing below it could recall the strong $1850 support. The next downside target awaits at $1800 – psychological level.
- Gold stuck in an $1890-1850 range after Monday’s 5% slump.
- Traders divided between rising covid infections, vaccine optimism.
- Four-hour chart warrants caution while below $1900 mark.
Gold’s (XAU/USD) posted a green candle on Thursday, having risen 0.60% to finish around $1875. Despite the uptick, the bright metal remained trapped in its recent range between $1890-$1850. Gold benefited from increasing concerns over the global economic recovery, in the wake of the continued rise in coronavirus, which negated the optimism over the vaccine progress. The US Treasury yields fell 10 basis points on Thursday on economic growth concerns and lifted the demand for the yieldless gold. Although the gains in the metal remained capped, as the US dollar held steady in the upper bound of this week’s range on fresh concerns over the fiscal stimulus and Wall Street tumble.
Heading into a weekly close this Friday, gold traders await a strong catalyst to break free from the range trade, as covid updates from across the globe will continue to influence the broader market sentiment and dollar flows. Also, the US Michigan Consumer Sentiment data will be closely eyed alongside reports of potential restrictions likely to be imposed in the US states.
Gold: Short-tern technical outlook
Four-hour chart
Looking at the four-hour (4H) chart, gold extends its downside consolidation phase following the 5% slump seen on Monday.
Although higher lows are seen over the past hours, the risks remain skewed to the downside, as the Relative Strength Index (RSI) remains in the bearish territory, currently at 44.55.
To the upside, the convergence of the 50, 100 and 200-4H Simple Moving Averages (SMA) around the $1900 level is the level to beat for the bulls.
The bearish bias remains intact so long as the price stays below the aforesaid critical resistance. A daily closing above the latter is needed to negate the downside bias.
Alternatively, a breach of the rising trendline support at $1863 and a subsequent daily closing below it could recall the strong $1850 support. The next downside target awaits at $1800 – psychological level.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.