Gold Prices at Over 1-Week High Amid Dollar Weakness – 02 March 2023
02 Mar 2023
As the dollar rise slows, gold prices increase.
Gold prices hovered at an over-one-week high on Thursday as weakness in the dollar benefited the yellow metal, while copper steadied after a strong rally this week on increasing optimism over a Chinese economic recovery.
Bullion prices rose for three consecutive sessions from their weakest level this year, as a February rally in the dollar appeared to have run out of steam. The greenback fell sharply against a basket of currencies on Wednesday, also hit by some profit-taking after rallying nearly 3% in the past month.
Spot gold steadied around $1,837.38 an ounce, while gold futures were flat at $1,843.75 an ounce by 19:22 ET (00:22 GMT). Both instruments rose about 0.6% and 0.4%, respectively, on Wednesday.
Stronger-than-expected German inflation readings also raised concerns that the European Central Bank will keep raising interest rates at a sharp clip. The prospect of rising interest rates bodes poorly for metal markets, as it drives up the opportunity cost of holding non-yielding assets.
Metal prices slumped in 2022 on this trade and may face more weakness in the coming months. While the yellow metal stands to benefit from a reversal in U.S. monetary policy eventually, such a reversal seems unlikely in the near term, given that inflation is still running red hot in the country.
Focus today is on euro zone inflation data, as well as a reading on U.S. nonfarm productivity through the fourth quarter.
GOLD DAILY CHART:
Gold is currently trading in the down channel. But it has taken support and trying to reverse to the upside.
Gold is currently trading below 20&50 SMA.
RSI is in buying zone which suggests bullishness and Stochastic suggests no trend.
Gold’s immediate resistance is at 1843.64 & its immediate support level is 1829.27
HOW TO TRADE GOLD
Gold is trading in a down channel; it took support from its support zone by making a bullish hammer. Now it can continue to trade upside if it breaks its immediate resistance.