Gold Price Prediction: 20 & 50 EMA Supports Prices – Brace for Buying!
Arslan Butt • 3 min read
The market trend factors in multiple indicators, including Simple Moving Average, Exponential Moving Average, Pivot Point, Bollinger Bands, Relative Strength Index, and Stochastic.
Today in the Asian trading session, the yellow metal GOLD succeeded to stop its early-day losing streak and drew some modest bids around above $1,747 level as the upbeat U.S. inflation figures and hopes of further stimulus from U.S. President Joe Biden keeps the market trading sentiment bullish, which tends to weaken the U.S. dollar and contribute to the yellow metal gains.
Moreover, the prices took some further support from the concerns over the recent halt in the use of the Johnson & Johnson (NYSE: JNJ) COVID-19 vaccine. Besides this, the tension between the U.S. and China intensifies further after China warned the U.S. to control its relations with Taiwan, which helps the safe haven metal limit its deeper losses. On the opposite side, the upbeat market mood, backed by a combination of factors, was seen as one of the critical factors that cap additional gains in the safe haven metal. The yellow metal prices are currently trading at 1,746.07 and consolidating in the range between 1,740.88 and 1,749.37.
Despite the recent halt in the use of the Johnson & Johnson (J&J) vaccine over blood clotting issues, the market trading sentiment has been flashing green since the day started amid the positive U.S. inflation figures and expectations of further stimulus from the U.S. President Joe Biden. Biden showed a willingness to push for a $2.25 trillion infrastructure plan despite Republicans’ dislike for tax hikes. The bullish attitude around the equity market took further pace following the U.S. releasing upbeat inflation figures, suggesting that its economy is recovering from the COVID-19 crisis. At the data front, the U.S. core consumer price index (CPI) grew 0.3% month-on-month in March, versus the 0.2% growth in forecasts and February’s 0.1% growth. In the meantime, the CPI rose 0.6% month-on-month, its largest gain since August 2012.
As a result of an upbeat market mood, the broad-based U.S. dollar failed to stop its overnight bearish bias. It remained depressed on the day as investors continue to digest a higher-than-expected rise in U.S. inflation. It is worth mentioning that inflation has been anticipated to increase in the April-June quarter. However, the previously released figures were a bit stronger than expected. Meanwhile, the declines in the greenback were further bolstered by the market’s upbeat sentiment. Hence, the declines in the U.S. dollar were seen as the critical factor that helps the gold prices to stay bid as its price is inversely related to the price of the U.S. dollar. The U.S. Dollar Index that tracks the greenback against a bucket of other currencies dropped by 0.12% to 91.735 by 12:51 AM ET (4:51 AM GMT). Furthermore, the yellow metal’s upticks gathered further pace amid concerns over the recent halt in using the Johnson & Johnson (NYSE: JNJ) COVID-19 vaccine. As per the latest report, the U.S. Food and Drug Administration (FDA) and the Centers for Disease Control and Prevention (CDC) halted the use of the Johnson & Johnson (J&J) vaccine in almost 50 states in the U.S. This happened after six women developed a rare and severe form of blood clotting; besides, the US-China tension remains on the card as Beijing continues to warn Washington to control its ties with Taiwan, which in turn, probes the risk-on market sentiment and helps gold to limit its deeper losses. Looking ahead, the market traders will keep their eyes on Fed Chairman Jerome Powell’s speech, which is due at 16:00 GMT. Apart from this, the U.S. dollar price movement will continue to play a key role in the gold direction.
GOLD – XAU/USD Daily Support and Resistance
Pivot Point 1742.99
About the author
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.