Technical Analysis

GOLD Price Analysis – March 27, 2023

By LonghornFX Technical Analysis
Mar 27, 20234 min

Daily Price Outlook

Gold (XAU/USD) is trading at $1,975.11, down by 0.18% over the past 24 hours. The price of gold has started to decline following strong preliminary US PMI data.

Additionally, as US officials reassure investors, the demand for gold as a safe-haven asset decreases.

Uptick in US Private Sector Business Activity

A sharp increase in overall economic activity suggests that demand is robust, and the Federal Reserve (Fed) will face challenges in attempting to lower US inflation.

On Friday, significant US Durable Goods Orders and PMI data were mixed, providing traders with no clear direction for the metal's next move. Durable Goods Orders improved from January's -5.0% figure to a better -1.0% in February, but fell short of the 0.6% anticipated.

Furthermore, a report revealed that the US Manufacturing PMI increased to 49.3 from the previous release of 47.3 and the consensus of 47.0. The Services PMI rose to 53.8, surpassing forecasts of 50.5 and the previously reported 50.6.

Last week, Fed Chairman Jerome Powell implied that few rate hikes are currently planned to avoid a financial collapse. However, recent PMI data may push the Fed to raise rates further.

The strong PMI data supported the Dollar Index (DXY), trading at 103.07 after a significant rebound. The yield on the US 10-year Treasury fell to 3.372%.

As a result, despite lower rates favoring Gold, the rising US Dollar has weighed on XAU/USD.

Fed Focus on Inflation

Meanwhile, a rapid uptick in Deutsche Bank's credit default swaps has reignited market concerns, leading to a move toward risk appetite on Friday.

Neel Kashkari, President of the Minneapolis Fed, stated on Sunday that recent stress in the banking industry and the potential for a secondary credit crisis push the US closer to recession. If recession concerns become widespread, the Fed would face a difficult decision on raising interest rates.

Furthermore, St. Louis Fed President James Bullard believes the Fed will likely need to raise interest rates more than initially anticipated, as the swift response from US authorities reduces stress in the banking sector, and the economy and inflation remain strong.

James Bullard's comments alleviated risks to the banking industry posed by excessively high rates. It also emphasized that the Fed could now focus on achieving its inflation target instead of worrying about additional bank runs.

Fed officials have expressed confidence in the stability and resilience of the US banking system while emphasizing that inflation remains a top concern. Consequently, the demand for gold as a safe-haven asset decreases after Fed officials reassure investors, weighing on the XAU/USD.

 Gold Price Chart - Source: Tradingview

Gold (XAU/USD) Intraday Technical Levels

Support      Resistance

1971            2010

1948            2026

1932            2049

Pivot Point: 1987

Gold (XAU/USD) – Technical Outlook

Gold prices recently tested the $2,000.00 barrier once more, but experienced a bearish bounce, subsequently testing the intraday bullish channel's support line shown on the chart.

This was accompanied by positive signals from the stochastic indicator, which is anticipated to encourage the price to resume its primary bullish trend, with the next target set at $2,040.00.

As a result, we will maintain our overall bullish outlook, and the price must surpass the previously recorded high of $2,009.80 to confirm the continuation of the bullish wave. It is important to note that a breach of the $1,962.50 level would halt the expected rise and put pressure on the price to undergo a bearish correction.

The targets for this correction would begin at $1,933.20 and extend to $1,885.90 once the previous level is surpassed. Today's expected trading range is between $1,960.00 support and $2,000.00 resistance.


    * EUR/USD Price Analysis – March 27, 2023

    * S&P500 (SPX) Price Analysis – March 27, 2023

    * GOLD Price Analysis – March 24, 2023



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