Gold price heading for a test of the psychological level of $2000 USD
The gold price is heading for a test
As the price of gold gets closer to $2,000 USD, Easter Monday’s weak market conditions add a little more spice for bulls. Gold price changes (XAU/USD) seem to be bigger than they are because there isn’t much trading going on. A 0.50 percent drop in US stock futures shows that the market is risky.
- Gold price poised to recover $2000 USD in flight to safety.
- High inflation, the risks of recession and the Russian-Ukrainian war reinforce the attractiveness of safe havens such as gold.
- Fed Chairman Jerome Powell’s speech will keep investors busy this week.
Continued military actions by Russia in the western Ukrainian city of Lviv and the southern port city of Mariupol show that there is no sign of a peace deal, which makes people even more worried.
At the same time, the Ukraine crisis has caused a rise in global inflation, which is making investors seek safety in the price of gold, which protects against inflation. Buyers aren’t paying attention to how strong the US dollar and Treasury yields are. This is because a flight to safety is making gold, the traditional store of value, more appealing.
Also, lockdowns in China and a possible ban on Russian gas by the European Union (EU) could make inflation and growth worries worse. This was seen as another reason why the metal was a good way to protect against prices going up. Investors will now pay attention to a speech by St. Louis Fed Chairman and FOMC member James Bullard, who will give clues about what the Fed is likely to do with its monetary policy. But Fed Chairman Jerome Powell’s speech, which will happen later this week, will be the big event.
“We think the Fed is mostly on board with moving toward near neutrality by the end of 2022, and Governor Brainard recently backed up this point of view. Analysts at TD Securities said that people will pay attention to what President Powell says at an IMF panel on the global economy.
“As the Fed makes it clear that it wants to reach neutrality by the end of the year and start an aggressive QT regime, few people are leaving the gold markets because they want to keep some options against the Fed’s plan,” the analysts said.
Gold Technical Analysis (XAU/USD)
The bulls are in charge of the gold market, and they are driving up the price. During the daily period, the price of gold (XAU/USD) kept trying to break out of its previous critical level, which was reached at its highest point on March 24 at $1966.18 USD. The 20-day and 50-day exponential moving averages (EMAs) are moving up, which is another sign that the market is going up. The momentum oscillator’s relative strength index (RSI) (14) broke above 60.00, which means there will be stronger bullish momentum going forward.
Gold Price Chart (XAU/USD) Daily
Chart of Gold Prices (XAU/USD) Gold price in XAU per USD on April 18, 2022