The price of gold is heading towards a psychological level test of $ 2000 USD

The price of gold is heading towards a psychological level test of $ 2000 USD

The weak market conditions induced by Easter Monday offer a little more spice to the bulls as the price of gold approaches the $ 2000 USD level. Light trading appears to exaggerate movements in gold prices (XAU / USD) as a 0.50% decline in US stock futures reflects a risky market profile.

  • The price of gold is poised to recover $ 2000 USD in flight to safety.
  • High inflation, recession risks and the Russian-Ukrainian war reinforce the attractiveness of safe-haven assets such as gold.
  • Fed Chairman Jerome Powell’s speech will keep investors busy this week.

Continued Russian military action in the western Ukrainian city of Lviv and the southern port city of Mariupol suggest a peace deal is not in sight, fueling anxiety.

Meanwhile, the surge in global inflation caused by the Ukrainian crisis is forcing investors to take refuge in the price of gold that protects against inflation. Buyers are ignoring the considerable strength of the US dollar along with Treasury yields as a flight to safety makes the traditional store of value, gold, more attractive.

In addition, blockades in China and a possible European Union (EU) embargo on gaz Russia could likely intensify inflation and growth fears. This was seen as another factor that made the metal more attractive as a hedge against rising costs. Investors will now focus on a speech by St. Louis Fed Chairman and FOMC member James Bullard, who will provide insight into the Fed’s likely monetary policy action. However, the mega event will be Fed Chairman Jerome Powell’s expected speech. for the end of this week.

“We believe the Fed is broadly in line with the move towards near neutrality by the end of 2022, with Governor Brainard recently advocating this view. President Powell’s remarks during an IMF panel on the global economy will attract attention, ”said analysts from TD Securities.

“As the Fed signals its intention to achieve neutrality by the end of the year and launch an aggressive QT regime, exits from the gold markets have been rare as participants are happy to hold some options against the plan announced by the Fed. amid fears of growth, “the analysts added.

Gold Technical Analysis (XAU / USD)

The bulls have control of the gold market and are pushing the price to new highs. During the daily period, the price of gold (XAU / USD) repeatedly tested the breakout of the previous critical level at the March 24 high of $ 1966.18. The 20 and 50-day exponential moving averages (EMAs) are trending higher, adding bullish bias. The Relative Strength Index (RSI) (14) of the momentum oscillator broke above 60.00, indicating more solid bullish momentum going forward.

Gold price chart (XAU / USD) daily

Par Sagar Dua, FXStreet

Sagar began his career as a teacher to teach economic and financial management subjects to postgraduate students at a university. Subsequently, he entered the world of global stocks and the Forex markets. He has worked with consulting firms as a research analyst and guided investors to make informed decisions. He holds a Bachelor of Commerce degree with a major in Finance and Economics from Maharishi Dayanand University in Rohtak, India.

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The views expressed herein are those of the author only and do not necessarily reflect the views of Forex Quebec. Every investment and trading move carries risk, you should do your research when making a decision.

Disclaimer: The information and opinions contained in this report are provided for general information purposes only and do not constitute an offer or solicitation to buy or sell foreign exchange contracts or CFDs. Although the information contained herein comes from sources believed to be reliable, the author does not guarantee its accuracy or completeness and assumes no responsibility for any direct, indirect or consequential damages that may arise from anyone who relies on such information.

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