Gold Price Forecast: XAU/USD scales above $1,910 as SVB fallout limits Fed’s tightening pace


Share:
  • Gold price has delivered a three-day winning streak on hopes of a slowdown in the Fed’s policy tightening pace.
  • Going forward, a sheer volatility is expected ahead of the US inflation data.
  • A decisive break above 61.8% Fibo indicates that the asset will recapture the previous swing high ahead.

Gold price (XAU/USD) has refreshed its five-week high at $1,914.70 in the early Asian session. The precious metal has delivered a three-day winning streak and is expected to continue its upside momentum as a sudden collapse of Silicon Valley Bank (SVB) might force the Federal Reserve (Fed) to continue a lower pace of policy tightening if not halt the restrictive regime.

President Joe Biden said the administration's swift actions to ensure depositors can access their funds in Silicon Valley Bank (SVB) and Signature Bank (SBNY) should give Americans confidence that the U.S. banking system was safe, as reported by Reuters.

The US Dollar Index (DXY) has sensed an intermediate cushion around 103.50, however, sheer volatility is expected ahead as investors will keep an eye on the United States Consumer Price Index (CPI) data.

Analysts at Credit Suisse expect “Expect core CPI inflation to remain steady at 0.4% MoM in February, causing the YoY reading to tick down to 5.5%. Energy and food prices are likely to moderate, with headline inflation also coming in at 0.4% MoM. A reading in-line with our expectations would be uncomfortably high for the Fed, but still consistent with gradual disinflation this year.”

S&P500 futures are showing marginal gains after a subdued Monday, a case of a dead cat bounce, however, the risk sentiment is still negative. The 10-year US Treasury yields dropped to 3.54% as Fed chair Jerome Powell won’t go heavy on interest rates to maintain consumer confidence in the economy.

Gold technical analysis

Gold price has scaled above the 61.8% Fibonacci retracement (placed from February 2 high at $1,959.71 to February 28 low at $1,804.76) at $1.901.24. A decisive break above 61.8% Fibo indicates that the asset will recapture the previous swing high ahead.

Upward-sloping 20-and 50-period Exponential Moving Averages (EMAs) at $1,900 and $1,883.00 add to the upside filters.

The Relative Strength Index (RSI) (14) oscillates in the bullish range of 60.00-80.00, which indicates an upside momentum is already active. However, some corrections due to an overbought situation cannot be ruled out.

Gold two-hour chart

XAU/USD

Overview
Today last price 1911.37
Today Daily Change 41.45
Today Daily Change % 2.22
Today daily open 1869.92
 
Trends
Daily SMA20 1835.48
Daily SMA50 1871.07
Daily SMA100 1810.46
Daily SMA200 1775.06
 
Levels
Previous Daily High 1870.09
Previous Daily Low 1827.77
Previous Weekly High 1870.09
Previous Weekly Low 1809.46
Previous Monthly High 1959.8
Previous Monthly Low 1804.76
Daily Fibonacci 38.2% 1853.92
Daily Fibonacci 61.8% 1843.94
Daily Pivot Point S1 1841.76
Daily Pivot Point S2 1813.61
Daily Pivot Point S3 1799.44
Daily Pivot Point R1 1884.08
Daily Pivot Point R2 1898.25
Daily Pivot Point R3 1926.4

 

 

Share: Feed news

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.

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content


Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content

Editors’ Picks

EUR/USD consolidates below 1.0850 amid upbeat mood

EUR/USD consolidates below 1.0850 amid upbeat mood

EUR/USD is easing below 1.0850 in the early European morning. Traders turn cautious, despite easing banking fears, as the focus shifts toward the euro area inflation data. The pair's pullback could be also attributed to a broad US Dollar rebound. 

EUR/USD News

GBP/USD turns south toward 1.2300 as US Dollar rebounds

GBP/USD turns south toward 1.2300 as US Dollar rebounds

GBP/USD is heading back toward 1.2300, fading the Asian bounce in early Europe. Broad-based US Dollar rebound, despite a better market mood and sluggish US Treasury bond yields, is weighing on the pair. US housing data awaited. 

GBP/USD News

Gold bears eye $1,930 as mixed sentiment underpins US Dollar rebound

Gold bears eye $1,930 as mixed sentiment underpins US Dollar rebound

Gold price (XAU/USD) renews its intraday low around $1,960 as it reverses the previous day’s corrective bounce amid early Wednesday in Europe. The precious metal’s latest losses could be linked to the US Dollar’s rebound amid fresh challenges to the risk appetite emanating from China.

Gold News

Ethereum supply shrinks by 70,000 ETH. Will Ethereum price hit $2,000?

Ethereum supply shrinks by 70,000 ETH. Will Ethereum price hit $2,000?

Ethereum transition from Proof-of-Work to Proof-of-Stake was the last major upgrade to the altcoin’s blockchain and the Shanghai hard fork is the next one. The shift to PoS purged 70,000 ETH tokens from the altcoin’s circulating supply. 

Read more

Market mood improves as banking fears ease

Market mood improves as banking fears ease

This week, financial markets will focus on key inflation figures from across the globe, speeches by Fed officials, and the US Senate hearings on SVB. Although some normality seems to be returning to markets, this could easily be disrupted by negative news.

Read more

Forex MAJORS

Cryptocurrencies

Signatures