The auspicious start of the new trading week saw gold prices surpass the key $1900 mark per ounce troy. The acute advance was on the back of diminishing open interest, which hints at the idea that the yellow metal could enter an impasse in the current sharp recovery. So far, the next hurdle of note for bullion emerges at the 2023 high at $1959 (February 2).

According to economists at TD Securities "Since there have been a lot of references to skewing policy to favor the lower end of income distribution, we judge the cuts would be aggressive as high unemployment would hurt that demographic most. To the extent that cuts real rates to levels below previous cyclical norms, Gold should benefit".

We expect prices to trend above $1,925 later in the year, with a significant upside risk in the months to come.

The downside break of a two-day-old ascending trend channel joins a bearish MACD signal and firmer RSI to keep Gold sellers hopeful. However, the 21-bar Exponential Moving Average (EMA) restricts the immediate downside of the XAU/USD near the $1,900 threshold.

Following that, the 38.2% Fibonacci retracement level of the metal’s upside from February 28, close to $1,873, can act as a buffer before directing the Gold price towards the March 06 swing high of near $1,858.

It should be noted, however, that the 200-EMA level surrounding $1,851 could act as the last defense for the XAU/USD buyers.

Alternatively, Gold price recovery remains elusive unless the quote stays below the stated channel’s lower line, close to $1,921 at the latest.

In a case where the XAU/USD remains firmer past $1,921, the previous monthly high surrounding $1,960 could lure the bulls.

Gold will be going bullish after a short bearish recovery

Mar 14 2023