XAU/USD gold futures settled above the $2000 psychological resistance once again to settle the last trading week. The price of the yellow metal has been mostly in a downtrend since it was recently overlooking an all-time high. But the recent rush of gold above the crucial psychological level was capped by a slight rise in the price of the US dollar.
With many market analysts being optimistic about gold, can prices go above $2,000?
- In the middle of last week's trading, the XAU/USD gold price rose to the resistance level of $2010 an ounce.
- It was subjected to profit-taking sales that pushed it towards the support level of $1974 an ounce, and closed trading stable around the level of $1989 an ounce.
- In general, the XAU/USD gold price recorded a weekly jump of 0.36%, which raises its gains since the beginning of the year 2023 to date to more than 9%.
In the same performance, silver prices, the sister commodity to gold, remained above the level of $25 an ounce by the end of last week’s trading. Accordingly, the price of the white metal enjoyed a weekly increase of 0.5%, in addition to an annual increase of more than 4.5%. Commenting on the performance of the gold market. Tae Wong, an independent metals trader in New York, told CNBC: “It looks likely that the price of gold will remain in its narrow range for now, although a weekly close below $1,965 could lead to further losses, while the bulls They would welcome a push back above the $2,000 psychological resistance an ounce.”
In general, investors watched the latest US inflation data, as the Fed's preferred measure of inflation showed mixed numbers. According to the advertiser, the personal consumption expenditures (PCE) price index fell to 4.2% year-on-year in March, while the core PCE index, which removes volatile food and energy prices, came in higher than expected at 4.6%.
Moreover, the Employment Cost Index rose 1.2% in the first quarter, slightly above economists' expectations of 1.1%.
In addition, the University of Michigan's US inflation expectations a year and five years ago jumped surprisingly to 4.6% and 3%, respectively.
Financial markets were mostly in the green, but the US dollar was able to post tepid gains on Friday. The US Dollar Index (DXY), which measures the performance of the US dollar against a basket of other major currencies, rose to 101.55, from an opening of 101.47. Generally, a stronger profit is bad for commodities priced in US dollars because it makes them more expensive for foreign investors to buy.
Another factor affecting the gold market
US Treasury market yields were mostly in the red, with the benchmark 10-year yield dropping 8.5 basis points to 3.443%. Movements in interest rates can affect the opportunity cost of holding non-yielding bullion.
In other metals markets, copper futures rose to $3.88 a pound. Platinum futures fell to $1,090.30 an ounce. Palladium futures rose to $1,515.00 an ounce.
Technical analysis of gold prices:
In the near term, and according to the performance on the hourly chart, it appears that the XAU/USD gold price is fluctuating within a bullish channel formation. This indicates a slight upward bias in market sentiment. Therefore, the bulls will be looking to ride the current rally towards $1996 or higher to $2005 an ounce. On the other hand, the bears will target profits at around $1982 or lower at $1975 an ounce.
On the long term, and according to the performance on the daily chart, it appears that the yellow metal XAU/USD is trading within a bearish channel formation. This indicates a significant long-term bearish bias in market sentiment. Therefore, the bears will target an extended decline around $1,950 or lower at $1,915 an ounce. On the other hand, the bulls will target long-term profits at around $2015 or higher at $2047 an ounce.
The gold market has an important date this week, as both the European Central Bank and the US Federal Reserve Bank will announce an update to their monetary policy, which will have a strong reaction on investor sentiment and the performance of the US dollar, and then after that the announcement of US job numbers, which will have a strong reaction on the dollar Hence the gold market as well.
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