GOLD PRICE, CHARTS AND ANALYSIS:
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How to Trade Gold
MOST READ: USD/CAD Price Forecast: Loonie Gains Continue Post US CPI
Gold (XAU/USD) FUNDAMENTAL BACKDROP
Gold prices finally broke below the $1900 handle following the European open dropping to a low of $1886 before recovering to trade back above the $1900 handle. Gold faced a wall of resistance above the $1910 level consolidating for the majority of the previous two days as markets regained some composure.
Yesterday brought the US inflation data release which seemed to have little impact on Gold as markets remain preoccupied with the SVB fallout. There remained a sense of nervousness in markets yet not enough to see a further push higher for safe-haven Gold, as key resistance levels came into play.
This morning did bring a deeper pullback which could be attributed to a bounce in the USD index as well as a recovery in US bond yields. The US 10Y Treasury bond yield rose to a high of 3.704% this morning after recording its biggest daily gain in 5 weeks on Tuesday while the 2Y yield continued its recovery this morning from its 6-month lows.
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Later today we have some high impact data out of the US with PPI and Retail Sales scheduled for release. A positive print could aid the dollar recovery and drag gold down once more, while a miss of the forecasted figures could have the opposite impact.
For all market-moving economic releases and events, see the DailyFX Calendar
TECHNICAL OUTLOOK AND FINAL THOUGHTS
Gold has been a winner from the recent fallout from the SVB collapse and Banking sector fears. The precious metal has seen its safe haven appeal return, something which for the last couple of months seemed to have been replaced by the US Dollar.
From a technical perspective, Gold remains in a delicate position as it flirts with the $1900 psychological level. Yesterday’s daily candle closed as a bearish inside bar hinting at further downside, whether this will be sustainable on it depends largely on whether the fear around SVB have well and truly subsided.
Recent price action shows an extended rally to the upside, with significant support resting around the $1860 level (6th March swing high). Bears on the other hand will remain hopeful if the gold price remains below the $1925 handle. Interesting and mixed signals at the moment from the precious metal, meaning traders need to be alert and aware at the possibility of whipsaw price movement as seen this morning.
Gold (XAU/USD) Daily Chart – March 15, 2023
Written by: Zain Vawda, Markets Writer for DailyFX.com
Contact and follow Zain on Twitter: @zvawda
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