Gold – XAU/USD Analysis - April 22, 2021

Ascending Triangle Breakout

Gold prices closed at $1792.30 after placing a high of $1794.10 and a low of $1777.70. Gold extended its gains and reached near $1800 level on Wednesday amid the falling U.S. Treasury yields and sagging global stocks due to revived fears of global economic recovery after a rising number of coronavirus cases from around the world.

The U.S. dollar index fell to 91.09 level on Wednesday from its daily high of 91.43 and caused weakness in the greenback that pushed gold prices even higher. In the meantime, the U.S. Treasury bond yield on a 10-year note also fell below 1.6% to 1.5540 level that added in the weakness of the U.S. dollar and helped precious metal to remain on a bullish track.

According to new data published by the World Health Organization, more new coronavirus cases were reported around the world last week than in any seven days since the beginning of the pandemic. According to the report, about 5.24 million new cases were recorded during last week. This figure broke the previous record set at the start of 2021 with 5.04 million new possibilities in the week ended on January 4. The latest surge was primarily driven by an outbreak in India where the authorities reported that about 300,000 new cases were reported in a single day. The WHO said that India accounts for almost one-third of all new cases worldwide. World Health Organization said that the death rate lead by coronavirus was also accelerating, with more than 83,000 deaths last week than the 76,000 during the week before.

According to a spokeswoman for the WHO, Margaret Harris noted that the pandemic caused 1 million deaths in 9-months, then 2 million deaths in 4-months, and now it took only 3-months to reach 3-million deaths caused by the pandemic. These developments added strength in the precious metal prices as the concerns regarding global economic recovery revived in the market and raised the appeal for safe-haven assets. The changed market sentiment helped to extend gains in the yellow metal.

There was no macroeconomic data from the U.S. side on Wednesday. Market participants are awaiting the release of a policy report from the European Central Bank that’s due on Thursday. Investors are awaiting the news for further clarity about the stimulus plans for the bloc. Whereas the U.S. Federal Reserve policy meeting is scheduled next week. Furthermore, the risk-off market mood was continuously supported by the rising tensions between the U.S. and China and U.S. and Russia. These geopolitical tensions kept the safe-haven appeal intact and gold metal higher.

Gold Intraday Technical Level

Support Resistance

1769.76 1780.56

1762.23 1783.83

1758.96 1791.36

Pivot point; 1773.03

Gold - XAU/USD - Technical Outlook

Gold is trading choppy between a narrow trading range of 1,798 - 1,787 level, having violated the ascending triangle pattern at 1,789. The precious metal was trading in an ascending triangle pattern that we spotted yesterday, and the pattern has now already been violated. On the higher side, it exposes gold prices towards an immediate resistance level of 1,798. Bullish crossover of 1,798 level opens up additional room for bulls until 1,813 resistance level. The immediate support stays at the 1,789 level, and break out of this level can extend the selling trend until the 1,776 level. The 20 & 50 periods EMA are in support of buying, but the further trends in gold will be highly influenced by the violation of the 1,798 – 1,789 trading range. All the best!