- XAU/EUR reaches a new year-to-date high at €1,634.04.
- Demand for gold increases as global inflation rises, and investors turn to the yellow metal as a hedge.
- XAU/EUR: RSi in overbought conditions suggests a correction towards €1,604 is on the cards.
Gold spot against the euro (XAU/EUR) is steady around the year-to-date high at €1,634.04, after edging up some 0.15% to trade at €1,632 during the day at the time of writing. As the week began, the precious metal extended its rally to eight days in a row.
During the Asian session, the precious metal edged lower towards the €1,620 lows, however, it found support around the 50-simple moving average (SMA), spiked towards the new 2021 yearly high at €1,634.04 and retreated above the 50-hour simple moving average at press time.
In the meantime, the German 10-year Bund yield has gained one basis point, though remains negative at -0.245%, caping the upside move in XAU/EUR.
According to TD analysts in a note to customers, “gold prices have managed to break out nonetheless as global markets scour for inflation-hedges.” The note further added, that “the breakout in gold has driven the China Smart Money group of funds to add a significant amount of new length in SHFE gold, which highlights a potential avenue for a significant amount of buying interest, considering that Shanghai gold net length remains near multi-year lows.”
XAU/EUR Price Forecast: Technical outlook
Daily chart
The non-yielding metal has an upward bias as depicted by daily moving averages (DMA’s) below the spot price. At time of writing it is testing the top trendline of the Andrew Pitchfork’s indicator, however, the Relative Strength Index (RSI) at 76 is in overbought conditions for the last four days, which suggests the possibility of a correction towards the November 13, 2020, high at €1,604.
If that outcome were to come to pass, and once the RSI exited overbought conditions, a test towards the November 9, 2020 high at €1,652 would be on the books, but it would find some hurdles on the way north. Initial resistance would come at €1,634.04. A breach of the latter would expose the top trendline of the Pitchfork’s indicator around €1,640-50.
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.