Gold Price Technical Analysis And Fundamental Overview report – 20 March 2023
20 Mar 2023
Gold increases due to ongoing financial concerns
While concerns about a global banking contagion linger, demand for safe havens is driving up gold prices. At the time of writing, the price of XAU/USD is $2,007 per Troy Ounce, up roughly 1% from the previous day.
While concerns about a global banking contagion linger, demand for safe havens is driving up gold prices. At the time of writing, the price of XAU/USD is $2,007 per Troy Ounce, up roughly 1% from the previous day. It is in a short-term uptrend, and more gain is likely to follow.
UBS takeover fails to calm markets in gold news
Investors were momentarily encouraged, and sentiment was stabilised by a deal that allowed rival UBS to acquire ailing lender Credit Suisse over the weekend, but the solace was only momentary. Concerns about the soundness of the financial system continue to drive investors towards safe assets. Step inside Solid Gold, please.
A lack of liquidity led to the demise of Credit Suisse and other institutions, including Silicon Valley Bank (SVB) and First Republic Bank before it. The significant government bond holdings of many banks have seen their value decline due to the rise in inflation and the increase in interest rates to combat it. This has decreased the value of their assets. This led to a shortage of banking liquidity, which was exacerbated by a decline in bank deposits.
US Dollar deteriorates as Fed rate bets decline
A temporary plateau in the value of the US Dollar, which it often moves inversely to because gold is traded in US Dollars, has also been positive for the price of gold. The US dollar has lost momentum due to expectations that the Federal Reserve will temper its aggressive interest rate hike programme considering concerns that further higher interest rates could worsen the financial crisis.
The US Dollar will suffer if bets on future Fed interest rate hikes continue to fall, which will also help the price of gold. Yet, the USD also benefits from the demand for haven assets, so if the situation develops, this will provide the currency a backdraught.
GOLD TECHNICAL ANALYSIS DAILY CHART:
The price of gold has started to rise again after finding support around $1,805 at the beginning of March. It has increased by over $200 to over $2,000 since then. The price of the precious metal is rising both quickly and gradually. Strong upward momentum suggests that it will likely keep increasing until it suddenly reverses course.
Gold is currently trading in up channel.
Gold is currently trading above all SMA.
RSI is in buying zone which suggests bullishness and Stochastic is suggesting up trend.
Gold resistance is at 2007.89 & its immediate support level is 1968.37
HOW TO TRADE GOLD
Gold is trading in up channel; it has broken previous day high and tested support zone. Gold can continue to trade upside if it holds above its support zone.