Daily Price Outlook
The XAU/USD is trading at 1,998.62, up by 0.08% in 24 hours. Demand for safe-haven assets helped drive up gold prices as an upsurge of disappointing US company reports and disappointing economic data fueled concerns about a possible recession this year.
Revived Concerns Over US Banking Sector
According to First Republic Bank's (FRB) quarterly profits report released on Monday, client deposits dropped more than expected, forcing the commercial bank to rely on outside sources to pay out advances.
Uncertainty in the banking industry returned on Tuesday because of the FRB's disappointing results reports, the executives' refusal to take questions, and the absence of earnings forecasts. Moreover, the bank's shares dropped by around 50%.
After the FRC reported a far larger-than-expected drop in deposits, which worsened sentiments towards regional banks, renewed worries of a financial crisis drove safe-haven demand. As a result, gold increased, showing that investors were primarily looking for safe-haven assets amid rising economic unpredictability.
Disappointing US Data and Speculation on Fed's Final Rate
According to the data released on Tuesday, the Consumer Confidence Index for April from the US Conference Board fell slightly from 104.0 to 101.3. Data on US consumer sentiment that was less than anticipated indicated that spending would be declining this year, slowing down economic development.
The US Dollar Index (DXY), a measure of the value of the dollar with a basket of six different currencies, declined 0.32% to 101.53. The United States 10-Year Bond Yield also held steady at around 3.39%. The disappointing US data strengthens XAU/USD.
Moreover, markets are divided over when the Federal Reserve may stop raising interest rates. The bank will likely give some hints as to how far higher interest rates will go when it meets next week and is largely anticipated to raise rates by 25 basis points. Later in the day, the impending US Durable Goods Orders report for March could provide some insight into potential terminal rates.
Daily Technical Levels
Pivot Point: 1993
GOLD(XAU/USD) – Technical Outlook
Yesterday, gold prices concluded on a positive note, settling above the $1,992.20 level. It is worth noting that recent trades have been confined within a symmetrical triangle pattern visible on the chart. This indicates that there is still a possibility for the correctional bearish trend to continue, supported by the negative stochastic pattern observed on the chart.
As a result, it is anticipated that there will be negative trades in the upcoming sessions, with the price needing to break both the $1,992.20 and $1,976.00 levels to confirm a rally towards the $1,957.30 level, which represents the next significant target. It is essential to note that breaking the $2,007.50 level would stop the negative scenario and trigger a new bullish wave on an intraday and short-term basis.
As for today, the expected trading range is between the support level of $1,980.00 and the resistance level of $2,010.00.
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