Gold Struggles to Break $2,000 Barrier Amid Renewed Banking Concerns and Recovering Risk Appetite

Gold (XAU/USD) is having difficulty breaking above the psychological resistance of $2,000 during the Asian trading session.

Arslan Butt•Wednesday, April 26, 2023•1 min read

GOLD (XAU/USD) is having difficulty breaking above the psychological resistance of $2,000 during the Asian trading session. On Tuesday, the precious metal experienced a strong rally as investors sought protection from renewed banking uncertainties. First Republic Bank’s quarterly earnings report revealed that customer deposits dropped more than expected, forcing the bank to rely on external funds for loan disbursements. This will lead to higher interest rates and affect the bank’s Net Interest Margins (NIMs).

Nevertheless, investors are starting to digest these banking concerns and are reallocating funds to the S&P500 futures. The index featuring 500 US stocks has seen significant gains in the Asian session, indicating a recovery in market participants’ risk appetite. Concurrently, 10-year US Treasury yields have rebounded to 3.41%.

The US Dollar Index (DXY) remains above 101.80 after a minor correction and is anticipated to maintain its range-bound performance before the release of the US Durable Goods Orders data for March. The data is expected to show a 0.8% expansion compared to a previous 1.0% contraction.

In terms of technical analysis, gold is trading within a symmetrical triangle pattern on an hourly scale, signifying a volatility contraction. The triangle’s upward and downward-sloping trendlines are placed at $1,971.62 and $2,012.44, respectively. Gold remains above the 50-period Exponential Moving Average (EMA) at $1,992.32, suggesting a strong upside bias.

As the Relative Strength Index (RSI) fluctuates between 40.00 and 60.00, investors seem to be waiting for a potential trigger.

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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.