Gold Prices Set to Conquer $2,050 Resistance as S&P500 Futures Fluctuate and US Dollar Weakens

The gold price (XAU/USD) is gaining momentum to breach the key resistance level of $2,050.00 during the Asian trading session.

Arslan Butt•Friday, April 14, 2023•2 min read

The GOLD price (XAU/USD) is gaining momentum to breach the key resistance level of $2,050.00 during the Asian trading session. After experiencing a temporary slowdown in its upward trend, the precious metal appears ready to continue its ascent.

S&P500 futures are experiencing volatility in the Asian market, following significant buying activity on Thursday that signaled a risk appetite among investors. The US Dollar Index (DXY) has reached an 11-month low of 100.80 and may decline further as market participants predict the Federal Reserve (Fed) will consider pausing rate hikes following the May monetary policy meeting.

Bloomberg has reported that US commercial banks have decreased their borrowing from two Federal Reserve lending facilities for four consecutive weeks. This comes as liquidity issues have begun to resolve after the collapse of Silicon Valley Bank last month. Reduced credit availability due to stringent credit conditions might slow the US economy, potentially alleviating inflationary pressures sooner and prompting Fed Chair Jerome Powell to end the policy-tightening cycle earlier than expected.

A significant market movement for the USD Index is anticipated on Friday, with the release of US Retail Sales data. Consensus estimates predict a contraction of 0.4% in the economic data. This decline in retail demand is expected to persist, mirroring the contraction seen in February, as the US labor market shows signs of weakening.

Gold Technical Outlook

GOLD price concluded yesterday above the $2,040.00 mark, bolstering the forecast of a continued bullish trend for both intraday and short-term periods, with the next primary target set at $2,074.85.

The current negative momentum displayed by the Stochastic indicator may result in brief sideways fluctuations and a temporary dip before resuming its upward trajectory. It’s important to note that the bullish channel persists in guiding the projected bullish wave, which will remain relevant as long as the $2,013.00 level isn’t breached and sustained with a daily close beneath it. Breaking this level could exert pressure on the price, leading to a bearish correction before the primary bullish wave resumes. Today’s anticipated trading range lies between a $2,025.00 support level and a $2,060.00 resistance level.

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ABOUT THE AUTHOR See More

Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.