Gold – XAU/USD Analysis - April 16, 2021

Ascending Triangle Breakout

On Thursday, Gold prices soared to 7-week highs to trade just beneath $1,770 per ounce afternoon in London following new economic figures that reported a record jump in the U.S. retail sales coincided with the previous month's $1,400 Covid stimulus checks delivered to most U.S. adults. The precious metal safe-haven-metal succeeded in extending its overnight winning streak and drew some further bids around above the $1,740 level as the U.S. dollar remains bearish around a one-month low. The U.S. dollar was being pressured by the Federal Reserve's discussions that interest rates can stay low, making U.S. bond yields weaker and contributes to the gold gains. Meanwhile, backed by the combination of factors, the upbeat market mood also played a significant role in undermining the safe-haven U.S. dollar, which lends some additional support to the gold prices to stay bid.

Apart from this, the intensified concerns over the coronavirus (COVID-19) vaccine shortages fuel the fears over slower economic recovery. As per the latest report, the US Centers for Disease Control and Prevention (CDC) is expected to extend the ban on the use of Johnson & Johnson's covid vaccine. This, in turn, exerted downside pressure on the market risk tone and contributed to U.S. dollar gains.

On the USD front, the broad-based U.S. dollar succeeded in stopping its overnight declines and edged higher during the Asian session on the day amid risk-off market sentiment. However, the U.S. dollar bullish bias was relatively unaffected by the Federal Reserve's demand of keeping an accommodative policy stance for a while longer. Hence, the gains in the U.S. dollar were seen as one of the key factors that kept the XAU/USD currency pair under pressure.

Although the precious metal gold managed to gain solid support despite the release of robust inflation data from the U.S. economy, the increase of the covid cases in the bloc also supported a bullish trend in the XAU/USD pair.

Gold Intraday Technical Level

Support Resistance

1730.36 1756.51

1713.78 1766.08

1704.21 1782.66

Pivot Point: 1739.18

Gold - XAU/USD - Technical Outlook

The precious metal gold is trading sharply bullish at 1,766 level, having violated an ascending triangle pattern on the 4-hour chart. The ascending triangle pattern extended resistance at 1,759 level, and since it's been violated now, the exact resistance level of 1,759 can work as support now. Gold is exhibiting bearish correction after placing a high of around 1,769 level, and so far, it has plunged until 1,759 support level. On the 1-hour chart, gold has closed candles above 1,759, triggering bounce off in gold until gold's resistance level of 1,769. A bullish breakout of 1,759 resistance opens up gold's buying trend next resistance level of 1,782. All the best!