Gold prices (XAU/USD) didn’t really know which direction to go on Wednesday. They went up a little and then down a little, but stayed around $2,035. It seems like traders are waiting for something new to happen before they make any big moves with precious metals. Even though things were a bit boring today, gold still looks good and could reach new highs soon. It’s been doing well for the past four weeks!
Good news for gold enthusiasts! The decrease in bond yields caused by the Fed’s loosening of monetary policies will continue to positively impact the yellow metal. To give you an idea, the U.S. Treasury curve has been on a downward trend since March due to issues in the banking sector, which have raised concerns about economic growth.
it seems like the latest economic data for the U.S. isn’t looking too great. The ISM manufacturing and services PMI for March didn’t meet expectations, suggesting that demand is going down quite a bit. If things don’t pick up soon, there’s a chance that layoffs could happen more often in the next few months, which could lead to a rough recession.
Did you know that if the world’s largest economy experiences a recession, it could actually be good news for gold prices? This is because the U.S. central bank might start cutting interest rates to prevent economic damage, which would give gold a boost. Additionally, if the recession causes people to feel more nervous about their investments, they may turn to safe-haven assets like gold. So keep an eye on the markets and see what happens!
Dear trader, it’s a good idea to keep an eye on the latest data to understand how the economy is doing and what the Fed might do next. One important piece of information coming out on Friday is the March U.S. labor market report. People think that employers added about 240,000 jobs last month, but it’s possible that number could be lower based on some other recent economic indicators. Just something to keep in mind!
GOLD TECHNICAL ANALYSIS
Great news! Gold has broken above the $2,000 level and is now at its highest since 2022. Traders are jumping on the bullish trend and pushing prices higher. With this upward momentum, XAU/USD might reach its all-time high of $2,075 soon. This aligns with the upper boundary of a medium-term ascending channel. And if it breaks through cleanly, we could see a move towards $2,130!
heads-up if sellers take over the market and cause a bit of a dip, we can look to find some support at $2,000. If things continue to go down, we may see support at $1,975 and then ultimately $1,940.