- Gold Price looks north as investors seek refuge amid inflation, growth risks.
- XAUUSD shrugs off firmer US dollar, yields on hawkish Fed’s outlook.
- Gold bulls keep their sight on $2,000 but acceptance above $1,990 is critical.
Having booked the second straight weekly gain, gold price is setting off a new week on the right footing, as bulls regather strength after Good Friday’s brief pullback. XAUUSD is sitting at the highest level since March 14 at $1,989, as the increased demand for safety outweighs the ongoing rally in the US Treasury yields alongside the dollar. With no end in sight to the Russia-Ukraine war and a likelihood of a European Union (EU) embargo on the Russian gas, commodities prices have shot through the roof, intensifying fears over inflation and its impact on the global economy.
That said, investors also remain worried about the risks to growth, as major central banks embark upon the path of policy normalization to curb raging inflation. Markets failed to find any comfort from the stronger China’s Q1 GDP data, as investors assess the impact of the recent covid lockdowns and the PBOC’s RRR cut.
Meanwhile, the dollar and the yields keep the upside rolling, as a 50-bps May Fed rate hike seems a done deal. The Fed commentary last week hinted that the world’s most powerful central bank looks to return to neutral rates sooner (than later). The ECB’s dovish surprise widened the yield differential in the favor of the dollar and provided extra legs to the upside in the US rates.
Also read: Chart of the Week, Gold: XAU/USD on verge of a 38.25% Fibo correction
Looking forward, the negative tone in the market sentiment will continue to keep the haven demand for Gold Price underpinned, although bulls could face an uphill battle should the dollar and yields continue firming up. The speech from the St. Louis Fed President James Bullard will stand out amid a data-scarce US docket and Easter Monday-led thin market conditions.
Gold Price: Daily chart
Gold’s daily chart shows that the price is facing stiff resistance at the March 14 highs of $1,990.
If the latter is scaled, then a retest of the $2,000 mark remains inevitable. The further upside will challenge the March 10 highs at $2,009.
The 14-day Relative Strength Index (RSI) is inching higher above the midline, justifying the bullish undertone in Gold Price.
Alternatively, a failure to surpass the $1,990 barrier will recall sellers, exposing Friday’s low of $1,961.
Ahead of that, the intraday lows of $1,971 will offer strong support to gold bulls.
Should the corrective decline pick up pace XAUUSD will then seek a test of the bullish 21-Dailoy Moving Average (DMA) at $1,943.
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
AUD/USD remains under pressure above 0.6400
AUD/USD managed to regain some composure and rebounded markedly from Tuesday’s YTD lows in the sub-0.6400 region ahead of the release of the Australian labour market report on Thursday.
EUR/USD holds above 1.0650 amid renewed selling pressure in US Dollar
The EUR/USD pair edges higher to 1.0672 on Thursday during the early Asian session. The recovery of that major pair is bolstered by renewed selling pressure in the US Dollar and a risk-friendly environment.
Gold retreats as lower US yields offset the impact of hawkish Powell speech
Gold prices retreated from close to weekly highs during the North American session on Wednesday amid an improvement in risk appetite. The bullish impulse arrived despite hawkish commentary by US Federal Reserve officials.
OMNI post nearly 50% loss after airdrop and exchange listing
Omni network lost nearly 50% of its value on Wednesday after investors dumped the token following its listing on top crypto exchanges. A potential reason for the crash may be due to the wider crypto market slump.
US stock continue to stumble as traders rethink rates
US stocks grappled with uncertainty on Wednesday in the wake of a cautious string of commentary from the US Federal Reserve officials. The S&P 500 is currently experiencing its longest non-bullish streak in months.