Gold Price Forecast: Brace to Trade Range Breakout
Gold (XAU/USD) is trading back and forth in a narrow range of $1,930.30-1,937.80 in anticipation of further escalation in the Ukraine
Gold (XAU/USD) is trading back and forth in a narrow range of $1,930.30-1,937.80 in anticipation of further escalation in the Ukraine conflict. Russia has been suspended as a member of the United Nations (UN) Human Rights Council. After a massacre in Bucha, Ukraine, the UN Human Rights Council had no choice but to expel Moscow as a member.
Earlier, Ukraine’s President Volodymyr Zelenskyy accused Russian insurgents of committing war crimes in the majority of Kyiv. Members of the UN Security Council voted against Russia in reaction to the claim. Meanwhile, according to Reuters, US senators decided to deprive Russia of most Favored nations’ trade status, which may stop normal trade with Russia and increase tariffs.
Meanwhile, the US dollar index (DXY) is waiting for a catalyst to propel the asset over the psychological level of 100.00. The DXY is now trading at 99.80, but it is expected to break beyond 100.00 shortly due to increased probabilities of the Federal Reserve raising interest rates by 50 basis points (bps) in May.
Gold is trapped in typical ranges, bouncing between a daily resistance and support channel. However, like a coil, the accumulation of energy and maintained force may be about to trigger a massive breakout, one way or the other. At the time of writing, XAU/USD is trading at $1,934.09, up 0.43 percent, and has ranged between $1,920.62 and $1,937.85.
The GOLD price has remained exceptionally robust in the face of the Federal Reserve’s most hawkish policy in a generation. Instead, the gold price is rising as a hedge against the fog of war, and it may also be linked to the inflationary and/or recessionary storylines that are playing out in markets.
Gold (XAU/USD) Technical Analysis
Technically, the yellow metal gold forecast suggests consolidation until either a clean break of $1,960 or $1,915 with firm daily closes above or below. Given the longer-term bullish trajectory, if the price is unable to break below $1,900, a run into the $2,000s is the more likely consequence of the build-up in this phase of consolidation.
In the short run, gold may find immediate support at $1,919, and a break below this level may lead to a price of $1,900. Similarly, resistance remains at $1,930 and $1,945. Good luck!
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