- Gold price regains strong positive traction on Friday and rallies to its highest level since February.
- Fears of a global banking crisis weigh on investors’ sentiment and lift the safe-haven XAU/USD.
- Bets for a less hawkish Fed, tumbling US bond yields, a weaker USD provide an additional boost.
Gold price catches fresh bids following the previous day's directionless price action and builds on its intraday positive move through the early North American session. The XAU/USD spikes to a fresh six-week high, around the $1,946 region, in the last hour and remains on track to register its biggest weekly gain since mid-November.
A fresh wave of the global risk-aversion trade - as depicted by renewed selling around the equity markets - boosts demand for traditional safe-haven assets and benefits Gold price. Despite multi-billion-dollar lifelines for troubled banks in the United States (US) and Europe, investors are still trying to determine whether the risk of a full-blown global banking crisis has been tamed and remain concerned about the widespread contagion. Adding to this, looming recession risks take a toll on the risk sentiment and drive haven flows towards the precious metal.
Furthermore, a steep decline in the US Treasury bond yields is seen as another factor that benefits the non-yielding Gold price and remains supportive of the strong intraday rally. The anti-risk flow, along with rising bets for a smaller 25 basis points (bps) rate hike at the upcoming Federal Open Market Committee (FOMC) meeting on March 21-22, drag the US bond yields lower. Investors now seem convinced that the Fed will adopt a less hawkish stance in the wake of last week's collapse of two mid-size US banks - Silicon Valley Bank and Signature Bank.
Meanwhile, diminishing odds for more aggressive policy tightening by the US central bank, along with tumbling US bond yields, keep the US Dollar (USD) depressed for the second straight day. A weaker Greenback provides an additional boost to the US Dollar-denominated Gold price, taking along some short-term trading stops near the previous weekly/monthly high around the $1,937 area. This might have already set the stage for a further near-term appreciating move towards the $1,959-$1,960 region, or the multi-month top touched in February.
Technical levels to watch
|Today last price||1949.52|
|Today Daily Change||30.01|
|Today Daily Change %||1.56|
|Today daily open||1919.51|
|Previous Daily High||1933.51|
|Previous Daily Low||1907.56|
|Previous Weekly High||1870.09|
|Previous Weekly Low||1809.46|
|Previous Monthly High||1959.8|
|Previous Monthly Low||1804.76|
|Daily Fibonacci 38.2%||1923.6|
|Daily Fibonacci 61.8%||1917.47|
|Daily Pivot Point S1||1906.88|
|Daily Pivot Point S2||1894.24|
|Daily Pivot Point S3||1880.93|
|Daily Pivot Point R1||1932.83|
|Daily Pivot Point R2||1946.14|
|Daily Pivot Point R3||1958.78|
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
EUR/USD closes in on 1.0800 on broad USD weakness
EUR/USD preserves its bullish momentum and continues to push higher toward 1.0800 on Tuesday. The positive shift witnessed in risk sentiment, as reflected by the positive opening in Wall Street, doesn't allow the US Dollar to find demand and helps the pair keep its footing.
GBP/USD stays in red around mid-1.2100s
GBP/USD continues to trade in negative territory at around 1.2250 on Tuesday despite the broad-based US Dollar weakness. Investors seem to be refraining from betting on Pound Sterling strength ahead of the Fed's and BOE's policy announcements.
Gold falls toward $1,950 as US yields push higher
Gold price extended its daily slide and declined below $1,960. The benchmark 10-year US Treasury bond yield is up nearly 3% on the day above 3.5% on improving risk mood, forcing XAU/USD to stay under bearish pressure ahead of Fed's policy decisions on Wednesday.
If Fed’s money printer goes brrr… will Bitcoin price hit $1 million?
Bitcoin has taken front and center stage after it restarted its 2023 rally in March. This resurgence of buying pressure pushed BTC to nine-month highs.
FX thoughts for the week
Do central banks face a conflict between their inflation mandate and financial stability? The markets are still grappling with this question and confidence in the financial sector has not fully recovered. For now, central banks are responding with a conditional no.