Gold has gained traction to start the week and extended its rally after clearing $2,000. Although XAU/USD retreated in the second half of the week from the one-year high it touched above $2,030, it managed to snap a two-week losing streak and posted its first weekly close above $2,000. Next week, March inflation data from the US and trade balance figures from China could impact the precious metal’s valuation.

The US Dollar (USD) came under selling pressure in the American session after the monthly PMI report published by the ISM revealed that the economic activity in the manufacturing sector continued to contract at an accelerating pace in March. Additionally, the inflation component of the survey, the Prices Paid sub-index, and the Employment sub-index both came in below 50, showing a decline in the sector’s input inflation employment. XAU/USD capitalized on the USD weakness and registered daily gains.

XAU/USD’s pullback on Wednesday and Thursday looks to be a technical correction following the pair’s climb outside of the ascending regression channel coming from November. The Relative Strength Index (RSI) indicator on the daily chart holds near 60, suggesting that the bullish bias stays intact in the near term.

In case the pair extends its correction, $2,000 (psychological level, static level) aligns as initial support. With a daily close below that level, additional losses toward $1,980 (20-day Simple Moving Average (SMA), mid-point of the ascending channel) and $1,960 (static level) could be witnessed.

If $2,000 stays intact, Gold price could stay in a consolidation phase early next week before targeting $2,020 (static level), $2,032 (one-year high set on April 5) and finally $2,050 (static level from March 2022).

Gold is sluggish but bullish above the orderblock

Apr 09 2023

Take Profit +3.31%

Holding time 24d0hr

1989.50

Entry price

2055.40

Take profit price