Gold Price Prediction: Descending Triangle Pattern in Play – Brace for Sell Trade!

Welcome back to another exciting week.

The precious metal GOLD prices closed at 1731.30 after placing a high of 1735.50 and a low of 1718.80. Gold prices rose on Friday but posted a first weekly decline in three due to higher Treasury yields and a strong US dollar that dented its safe-haven appeal. The upside in the yellow metal prices could be attributed to the rising cases of coronavirus worldwide due to the third wave and the low-interest rate policy of the Federal Reserve. On the other hand, the weekly decline in prices was due to the rising yields and the strong US dollar.

In Europe, the largest economy of the European Union, Germany re-enforced coronavirus restrictions and other members of the bloc followed after seeing the highest surge in the cases since January. This raised doubts over the pace of economic recovery and added to the demand for safe-haven assets like gold. On Friday, the President of the San Francisco Federal Reserve, Mary Daly said that the US job market was still nearly 10 million hobs short of before the coronavirus crisis. He added that although the US’s economic growth is expected to improve and the unemployment could fall, there was still a long road left to reach full employment levels that could take about 2-3 years or more.

At 17:30 GMT, the Core PCE Price Index in February remained flat at 0.1%. The Goods Trade Balance showed a deficit of -86.7B against the expected -85.5B and weighed on the US dollar and supported gold prices. The Personal Income also dropped to -7.1% against the expected -7.3% and supported the US dollar and capped further upside in prices. The Personal Spending dropped to -1.0% against the forecasted -0.8% and weighed on the US dollar and limited the rising trend in gold prices. The Prelim Wholesale Inventories dropped to 0.5% against the expected 1.2% and supported the US dollar that added further gains in the yellow metal. At 19:00 GMT, the Revised UoM Consumer Sentiment for March raised to 84.9 against the forecasted 83.6, supported the US dollar, and capped further upward momentum in gold. The Revised UoM Inflation Expectations remained flat at 3.1%.Furthermore, the upward momentum in bullion could also be attributed to the rising tensions between the US & China. The trade war between the two world’s largest economies has already weighed on the global economy for the past two years, and the fresh rising tensions between them could harm the economy further. These fears have been rising the demand for safe-haven in the market that ultimately supported the yellow metal prices.

Over the weekend, the Trade Representative of the United States, Katherine Tai, said that the US was not ready to lift tariffs on Chinese imports in the near future; however, it might open the trade negotiations with Beijing. Meanwhile, the US secretary of State Antony Blinken said that there were increasingly adversarial aspects to the relationship of the United States with China.

United States condemned China’s sanctions over the two religious rights officials of the US and a Canadian lawmaker against a dispute over Beijing’s treatment of Uighur Muslims and other minorities. These rising tensions between the world’s largest economies raised the fears of entering the situation into cold-war, supported the prices of yellow metal due to its status as safe-haven. Hence, gold rose on the last day of the week despite the US dollar’s strength and rising US Treasury yields.