Gold Breaks Above Range Level: Buyers Poised for Action

Summary:

Gold has breached its range boundary and is heading towards a four-hour fair value gap, with potential entry opportunities identified at a bullish fair value gap on the 15-minute timeframe, targeting 2380 with a stop-loss below 2315.

BUY XAUUSD

Close Time

CLOSED

2330.00

Entry Price

2380.00

2310.00

4071.18 +3.83 +0.09%

105.4

Pips

Profit

2310.00

2340.54

Exit Price

2330.00

Entry Price

2380.00

Gold faced a weekly decline amid concerns that persistent inflationary pressures might delay anticipated rate cuts in the US. The precious metal saw a dip on Friday, contributing to a 2.7% decrease for the week, driven by accelerated US inflation and uncertainties regarding the Federal Reserve's monetary policy.

The latest data on underlying US inflation, which surpassed expectations, raised doubts about the Fed's ability to initiate interest rate cuts in the near future. This development led to an uptick in Treasury yields, exerting downward pressure on gold prices. Historically, higher interest rates and yields have been unfavorable for gold, given its non-interest-bearing nature.

Fed Bank of Chicago President Austan Goolsbee's remarks emphasized the need for the central bank to reassess its policy stance in light of consistently high inflation readings. However, Thursday's inflation figures, coupled with a disappointing US gross domestic product report, reignited concerns about stagflation, potentially offering support to gold. As a traditional safe-haven asset, gold tends to attract investors during periods of economic uncertainty.

Market participants are eagerly awaiting the release of Friday's personal consumption expenditures index, which serves as the Fed's preferred gauge of inflation. Expectations suggest that inflationary pressures likely remained elevated in March, further influencing gold prices. Despite reaching record highs just two weeks ago, spot gold experienced a marginal decline, reaching $2,328.08 an ounce in Singapore trading.

The performance of gold in the coming weeks will likely be influenced by a combination of factors, including inflation data, Federal Reserve announcements, and broader economic indicators. As investors navigate these uncertainties, gold may continue to serve as a hedge against market volatility and inflationary risks.

TECHINCAL VIEWPOINT

XAUUSD 1 HOUR CHART

Gold has recently surpassed its established range zone of 2335-2315 and is currently trending towards the four-hour fair value gap (FVG). Although buyer activity is noticeable, a definitive entry signal is still pending. Upon further examination on the 15-minute timeframe, a bullish fair value gap emerges at 2330, presenting an opportune entry point for buyers to execute their orders. The projected target for this move is set at 2380, with a stop-loss order strategically placed below the 2315 level to mitigate downside risk.

TECNICAL RECOMMENDATION

BUY XAUUSD

ENTRY: 2330

TAKE PROFIT: 2380

STOPLOSS: 2310

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