The yellow metal is extending upward as US Treasury bond yields pull back further. The massive stimulus packages rolled out by Biden and an additional infrastructure proposal of $2.25 trillion is supposed to appreciate the gold prices, keeping dollar lower. Also, Biden government has hinted at raising corporate taxes to fund the massive stimulus package, which will give some ease to inflation concerns, and could hurt the global equity market supporting the uptrend in gold.

The US yields have dropped after US Senate parliamentarian late Tuesday decided to allow the Democrats to advance multiple pieces of legislation through the so-called 'reconciliation' process this year. This means Biden won't have to face Republicans to pass his expansionary fiscal program. But this may stoke the recent swell in inflation expectations, which is negative for gold prices.

So, the focus is on tonight's FOMC March 16-17 meeting minutes. Any uplift of economic projections and a noticeable shift in baseline rate path expectations to a less-dovish setting will weigh on gold prices. The recent surge in US inflation on hopes of an early Fed rate hike kept the gold prices lower. But going ahead, if the US yields continue to remain subdued then we can see a rise in gold prices.

As seen in the weekly chart, MCX Gold have witnessed a Falling Wedge Breakout whose pattern target is 48850 (which is also near 50 days moving average level). The chart have also experienced a Hidden Bullish Divergence with prices giving higher lows while RSI indicator giving lower lows, which will support upside movement in yellow metal. Currently, it is trading at 46200 and next resistance is seen at 47500 (Bollinger band's medium) and then at 48850. If prices cross and sustains above 48850 then doors will be open for 49500-51550. However, on downside support is located at 45000 below which next support is at 43350-42700.

Gold

The views and investment tips expressed by the expert on fxstreet.com are his own and for information purposes only. Any advice shared by the expert needs to be checked with the independent financial adviser before making any investment decisions.

Recommended Content


Recommended Content

Editors’ Picks

USD/JPY pops and drops on BoJ's expected hold

USD/JPY pops and drops on BoJ's expected hold

USD/JPY reverses a knee-jerk spike to 142.80 and returns to the red below 142.50 after the Bank of Japan announced on Friday that it maintained the short-term rate target in the range of 0.15%-0.25%, as widely expected. Governor Ueda's press conference is next in focus.  

USD/JPY News
AUD/USD bears attack 0.6800 amid PBOC's status-quo, cautious mood

AUD/USD bears attack 0.6800 amid PBOC's status-quo, cautious mood

AUD/USD attacks 0.6800 in Friday's Asian trading, extending its gradual retreat after the PBOC unexpectedly left mortgage lending rates unchanged in September. A cautious market mood also adds to the weight on the Aussie. Fedspeak eyed. 

AUD/USD News
Gold consolidates near record high, bullish potential seems intact

Gold consolidates near record high, bullish potential seems intact

Gold price regained positive traction on Thursday and rallied back closer to the all-time peak touched the previous day in reaction to the Federal Reserve's decision to start the policy easing cycle with an oversized rate cut.

Gold News
Ethereum rallies over 6% following decision to split Pectra upgrade into two phases

Ethereum rallies over 6% following decision to split Pectra upgrade into two phases

In its Consensus Layer Call on Thursday, Ethereum developers decided to split the upcoming Pectra upgrade into two batches. The decision follows concerns about potential risks in shipping the previously approved series of Ethereum improvement proposals.

Read more
Bank of Japan set to keep rates on hold after July’s hike shocked markets

Bank of Japan set to keep rates on hold after July’s hike shocked markets

The Bank of Japan is expected to keep its short-term interest rate target between 0.15% and 0.25% on Friday, following the conclusion of its two-day monetary policy review. The decision is set to be announced during the early Asian session. 

Read more
Moneta Markets review 2024: All you need to know

Moneta Markets review 2024: All you need to know

VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.

Read More

Majors

Cryptocurrencies

Signatures