Gold Price Analysis: XAU/USD in stasis, impending death cross may be a bear trap


  • The US dollar weakness fails to lift gold. 
  • An impending death cross may mark a major bottom.

Gold lacks clear directional bias despite an improved risk appetite and weakness in the US dollar. The yellow metal's daily chart shows key averages are set to chart a bearish crossover. 

At press time, gold is trading near $1,845 per ounce, having dropped by 0.24% on Monday. 

The US President Joe Biden announced on Tuesday that his administration is boosting weekly vaccine supply, weakening the selling pressure in stocks, and pushing the anti-risk dollar lower. Additional bearish pressure likely emerged from the International Monetary Fund's upward revision of the 2021 global growth forecasts. 

The dollar index, which tracks the greenback's value against majors, fell 0.27% to 90.27 on Tuesday and is trading flat near that level at press time. So far, however, the dollar weakness has failed to propel gold higher. 

The bulls need quick progress, as the 50-day Simple Moving Average (SMA) is on track to cross below the 200-day SMA in the next couple of days. That would confirm a death cross, a long-term bearish indicator. 

However, crossovers are lagging indicators, as SMAs are based on historical data and often mark major bottoms/tops. The metal's downtrend from the record high of $2,075 reached in August may bottom out with the impending death cross.

A move above the lower high of $1,875 created on Jan. 21 is needed to confirm a short-term bullish reversal. Meanwhle, the Jan. 18 low of $1,802 is the level to beat for the sellers. 

Daily chart

Trend: Neutral-to-bullish

Technical levels

XAU/USD

Overview
Today last price 1845
Today Daily Change -4.52
Today Daily Change % -0.24
Today daily open 1851.36
 
Trends
Daily SMA20 1873.34
Daily SMA50 1858.08
Daily SMA100 1881.2
Daily SMA200 1849.34
 
Levels
Previous Daily High 1861.8
Previous Daily Low 1848.46
Previous Weekly High 1875.2
Previous Weekly Low 1802.8
Previous Monthly High 1906.87
Previous Monthly Low 1775.52
Daily Fibonacci 38.2% 1853.56
Daily Fibonacci 61.8% 1856.7
Daily Pivot Point S1 1845.95
Daily Pivot Point S2 1840.53
Daily Pivot Point S3 1832.61
Daily Pivot Point R1 1859.29
Daily Pivot Point R2 1867.21
Daily Pivot Point R3 1872.63

 

 

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