Technical Analysis

Gold – XAU/USD Analysis - April 30, 2021

By LonghornFX Technical Analysis
Apr 30, 20213 min

20 & 50 EMA Extends Resistance!

Gold prices were closed at $1772.85 after placing a high of $1789.85 and a low of 1754.85. Gold prices edged down on Thursday as higher U.S. Treasury yields supported the U.S. dollar and weighed on the metal’s appeal. The benchmark U.S. Treasury yield on a 10-year note rose on Thursday to 1.68%, its two-week highest level, and supported the U.S. Dollar Index to reach 90.79. The rising U.S. treasury yield increased the opportunity cost of holding non-yielding bullion and dragged the precious metal on the downside.

The U.S. President Joe Biden unveiled an additional $1.8 trillion federal investment in education, child care, and paid family leave during his first address to Congress on Wednesday. This massive American Families Plan came in a month after he lay out a roughly $2 trillion infrastructure plan aimed at helping the nation recover from the coronavirus pandemic. The American Families Plan and Biden’s Infrastructure Plan are jointly known as the American Jobs Plan, aiming to improve the nation’s roads, bridges, broadband, railways, and schools. The corporate hiking taxes would pay this. These plans gave strength to the U.S. dollar and added pressure on yellow metal prices. Meanwhile, on Thursday, the World Gold Council (WGC) said that China’s gold demand in 2021 would see annual growth and revert to pre-pandemic levels if there are no dramatic changes to the global economic geopolitical situation.

On the data front, at 17:30 GMT, the Advance GDP for the quarter dropped to 6.4% against the forecasted 6.8% and weighed on the U.S. dollar that capped further losses in Gold. The Advance GDP Price Index for the quarter exceeded the expectations of 2.6% and came in as 4.1% that supported the U.S. dollar, and added further pressure on gold prices. The Unemployment Claims from last week also surged to 553K compared to the forecasted 545K and weighed on the U.S. dollar that kept the losses in Gold checked. At 19:00 GMT, the Pending Home sales in March declined to 1.9% against the projected 4.2% and weighed on the U.S. dollar and limited the losses in Gold.

On the coronavirus front, global cases of COVID-19 reached near 150 million on Thursday as the global tally was recorded as 149.6 million, with the death toll climbed above 3.15 million. The outbreak was hurting the Indian economy more than any other country as the death toll from COOVID-19 in India surpassed 200,000 due to the rising number of infections from the second wave. These negative developments related to coronavirus and its impact on the economy kept the losses in precious metal limited for the day.

Gold Intraday Technical Level

Support Resistance

1755.19 1790.19

1737.52 1807.52

1720.19 1825.19

Pivot Point: 1772.52

Gold - XAU/USD - Technical Outlook

Gold is trading slightly bullish at 1,770 level, facing immediate resistance at 1,777 level. On the 4-hour timeframe, the precious metal gold has formed series of neutral candles, suggesting a mixed bias among gold traders. On the downside, Gold has the potential to go after the next support area of 1,763. On the 4-hour timeframe, Gold is holding below the 20 & 50 periods EMA which extend solid resistance around 1,777 level today. Besides, the RSI and MACD exhibit mixed bias as the RSI value stays in a selling zone, and MACD holds in a buy zone. On Friday, Gold’s immediate resistance stays at 1,782 and 1,789, while support stays at 1,777 and 1,763. All the best!


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