Gold Price Forecast – Triple Top Pattern in Play, Eyes on a Breakout!

Despite the escalating US-China conflict and the continuation of the Israel-Palestine tussle, the market trading sentiment managed to stop its early-day negative performance and turned bullish ahead of the European session as Friday released upbeat activity numbers, as well as faster vaccinations in the West, helped the sentiment to overshadow the worsening virus reports. As per latest reports, developed countries like the U.S. recently showed readiness to share more vaccines with deserving countries, mainly from Asia and Latin America. 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.At the USD front, the broad-based U.S. dollar managed to stop its early-day bearish bias and started to flash green ahead of the European session. The encouraging U.S. manufacturing data raised hopes over the U.S. economic recovery and contributed to the American currency. At the data front, the IHS Markit said its flash U.S. manufacturing PMI grew to 61.5 in the first half of this month which was seen as the best reading since October 2009. Elsewhere, the airplane hijacking in Belarus and the Sino-American tussles, not to forget coronavirus (COVID-19) cases, can put safe-haven bids under the U.S. dollar. Conversely, the gains in the U.S. dollar could be temporary as the prevalent market upbeat mood, backed by the optimism surrounding the coronavirus (COVID-19) vaccine, tend to undermine safe-haven assets like the U.S. dollar. Therefore, the small gains in the U.S. dollar were seen as one of the key factors that kept the gold prices under pressure as it is inversely related to the U.S. dollar.

In contrast, the escalating coronavirus crisis in Asia, especially in India, keeps challenging the market’s risk-on mood, which was seen as one of the key factors that help the gold prices to stay bid. Apart from this, the long-lasting US-China war and the continuation of the Israel-Palestine tussle keep checking the market’s upbeat mood, which may provide extra support to bullion.

Moving on, the market traders will keep their eyes on upcoming speeches from several Fed officials, including governor Lael Brainard. Meanwhile, the many central banks are due to hand down their policy decisions throughout the week, which will also be closely observed. In addition to this, the Chicago Fed National Activity Index for April will be the key to watch.

S3 1841.75
S2 1861.04
S1 1871.17
Pivot Point 1880.33
R1 1890.46
R2 1899.62
R3 1918.91

On the technical front, GOLD is trading strongly bullish at 1,883 level. On the higher side, gold is likely to face resistance at 1,888 level and support at 1,871. The 4-hour timeframe has formed an ascending triangle pattern that’s likely to extend resistance at 1,888 level along with a support level of 1,871. The indicators like RSI and MACD support a bullish trend. Therefore, we should consider taking a buying trade over 1,880 level and selling trade below the same. A bullish breakout of 1,888 level can lead the price towards 1,899. Good luck!