Gold Price Prediction: Upward Channel Breakout, Quick Update on Sell Signal!

In contrast, the intensifying coronavirus conditions in India and Japan raised doubts over the global economic recovery, which probes the risk-on mood and helps bullion limit its deeper losses. Meanwhile, the losses were also capped by the cautious sentiment ahead of the Federal Open Market Committee (FOMC) meeting, which happened during the late U.S. session in the day. As of writing, gold is trading at 1,769.95 and consolidating in the range between 1,766.54 and 1,777.13.Despite the worsening coronavirus (COVID-19) conditions in India and Japan, the market trading sentiment succeeded to extend its previous day’s positive performance and remained bullish on the day. This was witnessed by the bullish appearance of Asia-Pacific stocks and gains in the S&P 500 Futures, highlighting the risk-on mood. However, the reason could be tied to the optimism concerning the coronavirus (COVID-19) vaccine and U.S. President Joe Biden’s stimulus plans. Meanwhile, the previously released upbeat data from the U.S. and Japan also played its major role in supporting the market trading mood. Elsewhere, U.S. Trade Representative (USTR) Katherine Tai ordered Novavax for further vaccine production, which further help the market mood to stay bid. Therefore, the positive movements in the market put a bid under the U.S. stocks, which was seen as one of the key factors that undermining the safe-haven gold prices.

At the U.S. data front, the Conference Board Consumer Confidence index grew to 121.7, a 14-month high, in April. Across the pond, Japan’s retail sales grew 5.2% in March year-on-year, the quickest pace in five months. The readings were higher than both the 4.7% rise in forecasts and February’s 1.5% contraction. Furthermore, the upticks in the market mood were further bolstered by reports suggesting that the U.S. is up for removing mask mandates in less congested areas. Meanwhile, Spain is set to welcome U.K. travelers again from this June. This news adds further optimism to the market mood.

Despite the risk-on mood, the broad-based U.S. dollar managed to extend its previous-day positive performance. It drew some further bids on the day as investors cheering the U.S. upbeat data, which suggest faster economic recovery. In the meantime, the optimism concerning the COVID-19 vaccine and U.S. President Joe Biden’s stimulus plans helped further U.S. dollar to stay bid. Investors seem cautious to place any strong positions ahead of the U.S. Federal Reserve’s latest policy decision and U.S. President Joe Biden’s address in front of a joint session of Congress. Both are due to happen later in the day. Hence, the gains in the U.S. dollar were seen as one of the key factors that kept the gold prices under pressure.

Alternatively, the coronavirus situation in India and Japan still does not show any sign of slowing down, which raised doubts about global economic performance. As per the latest report, India marked the sixth day of above 300K cases. This negative news keeps challenging the market’s upbeat mood, which may help the gold prices to limit their deeper losses.

Due to the pre-Fed mood and a light calendar, market traders will keep their eyes only on Australia’s Q1 Consumer Price Index (CPI). In addition, investors also await the U.S. Federal Reserve’s latest policy decision for further clues on the central bank’s monetary policy direction. Meanwhile, the U.S. dollar price movement will continue to play a key role in the bullion direction.