Gold Price Prediction: Ascending Triangle Pattern in Play, Brace for Buying!
Good morning, traders.
The precious metal GOLD edged higher, buoyed by a softer dollar. At the same time, traders anticipated U.S. weekly unemployment claims and March retail sales data to further confirm the recovery in the world’s largest economy. Despite the coronavirus vaccine jitters and geopolitical tensions, the market trading sentiment managed to extend its previous day’s positive performance and took some further bids on the day. Let me confirm that the risk barometer hit a fresh record high above 4,100 before recently easing to 4,122, up 0.10% intraday.
However, the reason could be attributed to the hopes of U.S. economic recovery and the expectations of the U.S. stimulus package. The U.S. economic recovery from COVID-19 picked up further pace after rising consumer sentiment. As a result, U.S. Federal Reserve Chairman Jerome Powell said that the country is on track for quicker growth, keeping the market trading sentiment bullish. In addition, the reason for the upbeat market mood could also be tied to the better than forecast employment report from Australia. Meanwhile, Aussie PM Scott Morison’s vaccine optimism lends additional support to the market sentiment.
As a result, the broad-based U.S. dollar failed to stop its previous day’s bearish performance and remained pessimistic on the day as investors continue to cheer the upbeat market mood, which makes the safe haven U.S. dollar weaker. The U.S. dollar is holding near a 3-week low against a basket of currencies as U.S. bond yields dropped instantly after the Federal Reserve hinted that interest rates could stay low for longer. Therefore, the drops in the U.S. dollar were seen as one of the key factors that help gold prices to remain bid as the price of the yellow metal 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 to 91.571.
On the other hand, the fears of a fresh US-China tussle and the fresh U.S. sanctions on Russia keep challenging the market’s upbeat mood and contribute to the gold price gains. As per the latest news, the dragon nation’s leading diplomat from Hong Kong warned the United States over its interference in internal affairs. In addition, Saudi Arabian interception of Houthi missiles and drones, as well as the latest U.S. sanctions on Russia, also question the market’s upbeat mood. Additionally, probing the upbeat market mood could be the vaccine jitters and blood clotting issues related to the AstraZeneca vaccine, which undermine the market sentiment and contribute to the safe haven metal’s gains.
Gold – XAU/USD – Daily Support and Resistance
S1 1706.88
S2 1723.03
S3 1729.54
Pivot Point 1739.18
R1 1745.69
R2 1755.33
R3 1771.48
The precious metal is trading in a narrow trading range of 1,749 – 1,740 level. A bullish breakout of 1,749 level can lead GOLD towards 1,759 level. On the downside, the bearish breakout of 1,741 levels can extend the selling trend until 1,733. The MACD and RSI are in the buying zone, supporting an upward trend. Therefore, we will be looking for a bullish trade upon breakout of 1,749 level today. Good luck!
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