Gold Price Forecast: XAU/USD’s path of least resistance is up ahead of Powell’s speech
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UPGRADE- Gold jumped in sync with stocks on Monday amid US stimulus hopes.
- Trump returned to the White House, the US dollar remained on the back foot.
- Technical set up points to the additional upside ahead of Powell’s speech.
With the US House Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin pushing hard for an additional $1.5 trillion fiscal stimulus to support the economic recovery, the sentiment on the global markets remained upbeat all through Monday. The US dollar, therefore, lost its safe-haven appeal, as gold (XAU/USD) prices rallied in tandem with the stocks. The bright metal hit two-week highs just shy of the $1920 mark before ending the day around $1912 levels. Further, optimism about US President Donald Trump’s potential discharge from the medical center also pressured the greenback while rendering gold-supportive.
Attention remains on the US stimulus talks likely to be continued this Tuesday, as the fundamentals continue to play second fiddle. Trump’s coronavirus updates will be also closely followed for fresh incentives. Speech by the US Federal Reserve (Fed) Chair Jerome Powell will be eyed, as he is due to speak about the US economic outlook at the National Association of Business Economics annual meeting.
Gold: Short-tern technical outlook
Hourly chart
Gold looks to extend Monday’s rally, having carved out a potential bull flag formation on the hourly chart.
A bull flag is a bullish continuation pattern, with the validation likely to occur on an hourly closing above the falling trendline resistance at $1913.51. The pattern target is measured at $1940.
The hourly Relative Strength Index (RSI) has turned lower but holds well above the midline, at 53.11, allowing for more upside.
To the downside, the falling trendline support at $1906.51 is likely to offer an immediate reprieve to the bulls. A break below which the $1900 mark will be put at risk.
- Gold jumped in sync with stocks on Monday amid US stimulus hopes.
- Trump returned to the White House, the US dollar remained on the back foot.
- Technical set up points to the additional upside ahead of Powell’s speech.
With the US House Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin pushing hard for an additional $1.5 trillion fiscal stimulus to support the economic recovery, the sentiment on the global markets remained upbeat all through Monday. The US dollar, therefore, lost its safe-haven appeal, as gold (XAU/USD) prices rallied in tandem with the stocks. The bright metal hit two-week highs just shy of the $1920 mark before ending the day around $1912 levels. Further, optimism about US President Donald Trump’s potential discharge from the medical center also pressured the greenback while rendering gold-supportive.
Attention remains on the US stimulus talks likely to be continued this Tuesday, as the fundamentals continue to play second fiddle. Trump’s coronavirus updates will be also closely followed for fresh incentives. Speech by the US Federal Reserve (Fed) Chair Jerome Powell will be eyed, as he is due to speak about the US economic outlook at the National Association of Business Economics annual meeting.
Gold: Short-tern technical outlook
Hourly chart
Gold looks to extend Monday’s rally, having carved out a potential bull flag formation on the hourly chart.
A bull flag is a bullish continuation pattern, with the validation likely to occur on an hourly closing above the falling trendline resistance at $1913.51. The pattern target is measured at $1940.
The hourly Relative Strength Index (RSI) has turned lower but holds well above the midline, at 53.11, allowing for more upside.
To the downside, the falling trendline support at $1906.51 is likely to offer an immediate reprieve to the bulls. A break below which the $1900 mark will be put at risk.
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