Gold Price Forecast – Triple Top Pattern Breakout, Can it Target 1,920?

On the different page, the overall market upbeat sentiment, backed by multiple factors, became one of the major factors that kept the pressure on any additional gains in the safe-haven-metal. Plus, the upticks in the gold price were also restricted by the reports suggesting that the U.S. removed Xiaomi (a Home electronics company) from the blacklist. Meanwhile, the previously released upbeat economic data suggest that the global economic recovery remains on the recovery track, which is also seen as a bearish factor for the traditional safe-haven assets. As of writing, the precious metal price is trading at 1,906.84 and consolidating in the range between 1,897.09 and 1,907.82.Despite the combination of negative factors, the market trading sentiment managed to extend its previous-day bullish performance. It remained well supported that the optimism surrounding the coronavirus (COVID-19) vaccine and upbeat economic data helped the market trading sentiment ignore the worsening virus reports from Asian countries. In addition, the market trading sentiment got additional lit after the U.S. removed Xiaomi (a Home electronics company) from the blacklist. The Australian Construction Output grew 2.4% in Q1, versus the market consensus at 2.2% on the data front. Meanwhile, Westpac- Melbourne Institute Leading Economic Index rose at 0.2% in April. These upbeat figures suggest a pick-up in the economic activities that boosted the market trading sentiment.

At the USD front, the broad-based U.S. dollar failed to stop its previous-day bearish bias and remains depressed near the multi-month lows at 89.60 on the day as Federal Reserve demand that stimulus will continue kept yields low. The Federal Reserve continued to downplay the inflation fears and referred to the fear as ‘transitory. These remarks dimmed the prospects of rate hike expectations in the June policy meeting. This, in turn, pushed the U.S. benchmark 10-year yields lower at 1.57% and contributed to the Us dollar losses. Meanwhile, the overall market upbeat mood, backed by multiple factors, also played its significant role in undermining the safe-haven U.S. dollar. Thus, the bearish sentiment surrounding the U.S. dollar acted as a tailwind for dollar-denominated commodities, including gold.

On a different note, the ever-increasing coronavirus cases in Asia, especially in India, keep challenging the market risk-on mood, which was seen as another critical factor that boosts the gold prices. It should be noted that the rising coronavirus cases in Victoria (the second-most populous state in Australia) could call for a new lockdown, which is negatively impacting the market sentiment and contributing to the safe-haven price gains. In addition to this, the US-China tussles and the ongoing tension in Gaza also exert downside pressure on the market mood, providing extra support to the bullion prices.

Moving on, the market traders will keep their eyes on the release of U.S. Durable Goods, Gross Domestic Product (GDP), Initial jobless claims, and Personal Consumption Expenditure (PCE) data for fresh direction. Apart from this, coronavirus (COVID-19 headlines and trade/political jitters will also entertain markets.

S3 1836.78
S2 1863.85
S1 1881.49
Pivot Point 1890.92
R1 1908.56
R2 1917.99
R3 1945.06

GOLD is trading strongly bullish around 1,907 level, having violated the strong resistance area of 1,890 level. On the upper side, the violation of the 1,907 level can extend further buying trend until the 1,920 level. The MACD and RSI support a strong buying trend, and thus, the breakout is expected ahead. Gold may find immediate support around 1,890 levels. Consider trading bullish over 1,907 level today and bearish below the same. Good luck!