Technical Analysis

GOLD Price Analysis – April 02, 2024

By LonghornFX Technical Analysis
Apr 2, 20244 min

Daily Price Outlook

Gold price (XAU/USD) has maintained its bullish rally and hit the intraday high of $2,259. This surge marks the sixth consecutive day of gains for the precious metal, as it attracts investors seeking safe-haven assets amidst global uncertainties. The reason behind Gold's upward trend is the heightened geopolitical tensions and uncertainty surrounding the Federal Reserve's interest rate cuts. Moving ahead, traders seem cautious to place any strong position as they await key releases such as JOLTS Job Openings and Factory Orders, coupled with speeches by influential Federal Open Market Committee (FOMC) members.

Geopolitical Tensions Impacting Safe-Haven Gold Price (XAU/USD) Price

On the geopolitical front, the ongoing tensions in the Middle East did not show any sign of slowing down. In fact, the situation in the Middle East has become more tense recently due to reports of an Israeli attack near Iran's embassy in Syria's capital. The escalating tensions in the Middle East, particularly the recent Israeli strike near Iran's embassy in Syria, have heightened market caution and increased demand for safe-haven assets like Gold. Therefore, this uncertainty and risk aversion among investors contributes to the support of XAU/USD prices.

Impact of Upbeat US Manufacturing Data on Gold Price and USD

On the other hand, the upbeat US manufacturing data released on Monday has shifted investor expectations regarding a June Federal Reserve rate cut. This shift has resulted in higher US Treasury bond yields, boosting the US Dollar to its highest level since February 14. Hence, the rise in US Treasury bond yields and the strengthening US Dollar following upbeat manufacturing data have the potential to cap gains in the Gold price as the stronger dollar typically makes Gold more expensive for investors holding other currencies, reducing demand and limiting price increases for the precious metal.

Impact of Upcoming Tuesday's US Economic Docket on Gold Price

Looking ahead, investors are keeping their eyes on the US economic docket, which includes key releases such as JOLTS Job Openings and Factory Orders. In the meantime, the speeches by influential Federal Open Market Committee (FOMC) members are expected to drive USD demand and provide fresh impetus to the market. Therefore, the outcome of these events will likely have a significant impact on Gold prices.

GOLD Price Chart - Source: Tradingview
GOLD Price Chart - Source: Tradingview

GOLD (XAU/USD) - Technical Analysis

The precious metal, Gold (XAU/USD), is currently charting a course of moderate ascent, trading up by 0.23% at a rate of $2,251.445. A pivotal juncture has been identified at the $2,266 level, indicated by the session's green pivot point line. This price serves as a threshold for determining Gold's immediate trajectory. Resistance points are arrayed above this marker at $2,285, $2,303, and $2,319, outlining potential ceilings that Gold's value ascent may encounter.

Conversely, support levels for Gold are ascertained at $2,249, with subsequent layers at $2,238 and $2,220, providing floors that could curtail any pullbacks in price. Technical indicators offer further insights; the Relative Strength Index (RSI) is at 63, signifying a market with some bullish momentum yet not quite reaching overbought conditions. Meanwhile, the 50-Day Exponential Moving Average (EMA) stands at $2,210, reinforcing a positive trend.

A closer examination of Gold’s recent movements reveals it has completed a 50% Fibonacci retracement at the $2,238 level, suggestive of a potential pivot for price direction. At present, Gold’s price fluctuates within a constricted range, oscillating between $2,265 and $2,250, indicating a phase of consolidation. A breakout from this bandwidth will likely dictate the next phase of significant price movements.

In summation, the technical perspective on Gold is leaning towards bullishness, particularly if the price maintains above the key $2,250 threshold. Trading strategy should consider an entry point for buying above $2,250, targeting profits around the $2,270 mark, while placing stop losses at $2,240 to mitigate downside risks.

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