As pre-data nervousness grows, the price of gold declines from its weekly high. With a financial crisis on the horizon and hawkish central bank discussions, EU and US inflation becomes critical for XAU/USD. Optimistic China statistics and relaxing Fed expectations fail to sway purchasers of Gold. Above $1,973, a pullback is challenging to predict, but beyond $1,960, XAU/USD bulls may hold onto optimism.
In early Friday morning Europe, the price of Gold (XAU/USD) eases from an intraday high to $1,980 while reducing weekly losses. In doing so, the yellow metal tracks the market’s consolidation before the important inflation hints from the US and the Eurozone. The recent hawkish remarks from Fed officials, particularly Chairman Jerome Powell, may have also impacted the price of Gold.
But, recent improvements in the official PMIs from China for March and waning concerns about a financial crisis, together with fading hawkish Fed wagers, have given gold purchasers reason for optimism. The conflicting US statistics and China’s and Brazil’s rejection of the US Dollar are on the same page.
The central bankers are still prepared to raise interest rates more if necessary to control the inflation problems, so the XAU/USD bears are only partially off the table. To provide direction, today’s releases of the US Core Personal Consumption Expenditure (PCE) Price Index for February and the Eurozone Harmonised Index of Consumer Prices (HICP) for March will be keenly scrutinized.
Key levels to monitor for the gold price
According to our Technical Confluence Indicator, the price of Gold is retracing towards the $1,973 area, which is the 10-DMA and Fibonacci 38.2% in one day.
The Fibonacci 38.2% in one week and the Pivot Point one-day S1 suggest $1,964 as another crucial mark to monitor before handing power to the bears if the XAU/USD bears break through the $1,973 support.
Farther down, the previous monthly high and the $1,960 mark serve as the final line of defense for Gold buyers.
On the other hand, to limit the immediate upward of the Gold price, Fibonacci’s 61.8% in a week joins the upper Bollinger bank.
Therefore, before leading the Gold price towards the $2,000 psychological magnet, Pivot Point one-day R1 may serve as an additional check for the XAU/USD bulls around $1,993.
This is how it appears on the tool:
Technical Confluences Detector:
As a short-term trader, you will find entry points for counter-trend strategies and hunt a few points at a time. The TCD (Technical Confluences Detector) is a tool to pinpoint those price levels with congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. This tool will enable you to anticipate the price levels where a medium- to long-term trend may halt and rest, where to unwind holdings, or where to increase your position size.