Gold Price Prediction: Upward Channel in Play, Good Time to Go Long?

At the particular time, the bullion price is trading at 1,783.05 and consolidating in the range between 1,773.94 and 1,783.54. Moving on, the traders seem cautious to place any strong position ahead of the U.S. Federal Reserve policy decision, which is due to be handed down later in the week. Despite the escalating coronavirus (COVID-19) woes and the Western tussle with China, not to forget Brexit woes, the market trading sentiment managed to stop its previous week’s bearish performance and started to flash green on the day as the U.S. governors recently allowed the restart of Johnson & Johnson vaccine after a 10-day ban of the key COVID-19 vaccine’s usage. Besides, the reason for the upbeat mood could also be tied to the reports suggesting that the U.S., Russia, and Saudi Arabia showed readiness to send necessary medical help to India amid the worsening situation in New Delhi. Additionally, U.S. President Joe Biden is getting a positive response for his infrastructure spending plan, which in turn raised hopes over the U.S. economic recovery and contributed to the S&P 500 Futures gains. Besides, the gains in the S&P 500 futures were further bolstered after the European Union (E.U.) allowed the American travelers, those who were vaccinated, from this summer. However, the prevalent buying bias surrounding the market sentiment was seen as one of the key factors that kept the lid on any additional gains in gold.

As a result of the market’s upbeat mood, the broad-based U.S. dollar failed to stop its early-day negative performance and remained depressed on the day as investors continue to cheer the market risk-on mood. Investors seem cautious to place any strong position ahead of the U.S. Federal Reserve policy decision due to be handed down later in the week. The U.S. Federal Reserve is widely expected to keep to the status quo. Hence, the losses in the U.S. dollar were seen as one of the key factors that help the gold prices to stay 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 90.945.

On the other side, the worsening coronavirus condition in Asia, especially in India, probes the market’s risk-on mood, which was seen as another key factor that boosts the gold prices. Apart from this, America is pushing global leaders to criticize China’s recent moves in Xinjiang. Meanwhile, the United Kingdom has also shown a dislike for Beijing’s recent actions against human rights.

Moving on, the light calendar amid holidays in New Zealand and Australia will offer a dull trading day ahead. However, the market traders will keep their eyes on U.S. Durable Good Orders, which are due later in the day. Apart from this, the trade/political headlines may entertain markets. The U.S. dollar price movement will continue to play a key role in gold’s direction across the ocean.

S1 1729.14
S2 1755.07
S3 1766.03
Pivot Point 1781
R1 1791.96
R2 1806.93
R3 1832.86

GOLD slipped to trade at 1,780 as it failed to break over 1,799 resistance. On the 4 hour timeframe, the precious metal has formed an upward channel that’s supporting a bullish trend in gold. Gold’s immediate resistance stays at 1,799 and 1,815 levels. At the same time, the support levels hold around 1,774 and 1,766. The closing of Doji and Spinning top candles over 1,774 supports suggests odds of a bullish trend today. Let’s keep an eye on the 1,775 level. Good luck!