- Gold wavers within familiar ranges after Tuesday’s volatility.
- Vaccine concerns appear to offset broad dollar strength.
- Awaits a range breakout, as the focus shifts to the ECB decision.
Gold (XAU/USD finished Tuesday with modest gains, having return to its recent trading range around $1930 after the wild swings. The bright metal slipped to the lowest level in two weeks at $1906 in the first half of the day amid unabated US dollar demand across the board. However, the bulls returned with pomp and show after the US indices tumbled amid sell-off in tech stocks and worries over the coronavirus vaccine. Pharma company AstraZeneca announced a halt in its vaccine trials over safety concerns, which dashed hopes of a swift recovery from the pandemic and weighed soured the risk sentiment. The omnipresent US-China tensions, this time over the US plans to ban cotton products, and US fiscal deadlock also aggravated the risk-off mood.
So far this Wednesday, gold extends its range play around $1930, divided between concerns over the vaccine and a broadly bid US dollar. Meanwhile, mounting no-deal Brexit fears and dovish expectations from the European Central Bank (ECB) monetary policy decision, due on Thursday, also keep the gold traders on the edge. The sentiment on Wall Street will emerge as a key catalyst in absence of relevant US macro news this Wednesday.
Gold: Daily chart
On the daily chart, gold continues to traverse within a symmetrical triangle pattern since early August and now looks primed for a range breakout.
Over the past month, the price has remained trapped between the 21-day Simple Moving Average (DMA) to the upside while the 50-DMA cushions the downside.
Therefore, investors await a strong catalyst to dive out of the range in either direction. The 14-day Relative Strength Index (RSI) has turned absolutely flatlined since the start of this week, although holds a mild bearish bias around 48.50.
A daily closing below the rising trendline support at $1925 will confirm the triangle pattern and open floors for a test of the $1900 mark. The next downside cap is seen at $1863 (August 12 low).
Alternatively, recapturing the 21-DMA at $1946 on a daily closing basis is critical to negate the ongoing bearish bias.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD steady below 1.0800 after US PCE meets expectations
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair barely reacted to US PCE inflation data, with the Greenback shedding some pips. Fed Chair Jerome Powell set to speak ahead of the weekly close.
GBP/USD hovers around 1.2620 in dull trading
GBP/USD trades sideways above 1.2600 amid a widespread holiday restraining action across financial markets. Investors took a long weekend ahead of critical United States employment data next week. Fed Chair Powell coming up next.
Gold price sits at all-time highs above $2,230
Gold price holds near a fresh all-time high at $2,236 in thinned trading amid the Easter Holiday. Most major world markets remain closed, although the United States published core PCE inflation, the Federal Reserve’s favorite inflation gauge.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.