Gold declines below $1,980 as the USD gains strength
FUNDAMENTAL OVERVIEW
In the early American session, the price of gold dropped below $1,980 as the most recent US statistics bolstered the US Dollar. However, the downside of XAU/USD is still constrained given that the benchmark 10-year US Treasury bond yield is down more than 1% below 3.5%.
Due to its historical role as a haven, gold prices (XAU/USD) continue to be under pressure below $2,000, printing a three-day downturn, even as buyers of the yellow metal prepare for weekly gains. In doing so, the XAU/USD ignores the US Dollar’s recent recovery, which is supported by encouraging inflation signals from the US economic calendar, amid concerns that the US debt ceiling would expire because policymakers can’t come to an agreement on solutions before the expected due date in June. The positive performance of equities due to the success of technological businesses is another factor that keeps the gold price firmer.
It’s important to note that the First Republic Bank’s (FRB) concerns appear to be supporting the gold price recovery despite the US Dollar’s sluggish movements ahead of the Fed’s preferred inflation gauge, the US Core PCE Price Index for March, which is predicted to fall to 4.5% YoY from 4.6% before. The recent critical remarks about Taiwan’s status made by a Chinese diplomat to Japan are on the same page as the US-China friction.
Moving on, gold traders will seek to reduce US inflationary pressure before the Federal Open Market Committee’s (FOMC) monetary policy meeting the following week.
GOLD TECHNICAL ANALYSIS DAILY CHART:
Technical Overview
Golds is currently trading in down channel.
Gold is currently trading below 5&20 SMA.
RSI is in buying zone which suggests bullishness and Stochastic is suggesting down trend.
Gold resistance is at 1990.55 & its immediate support level is 1981.74
HOW TO TRADE GOLD
Gold is currently trading in a down channel and building lower low structures. And currently it is trading at support zone, If the support zone breaks down, further declines in gold prices are to be expected.
