Gold Price eyes an upside to recapture $2,000 amid a flight to safety.
Elevated inflation, recession risks and the Russia-Ukraine war boost safe-haven appeal.
The speech from Fed Chair Jerome Powell will keep investors busy this week.
Gold bulls fought back control on Easter Monday after a brief pullback on Good Friday, driving XAUUSD to the highest levels in five weeks at $1,989. Gold Price remains determined to recapture the $2,000 psychological mark, as investors continue to seek refuge in the ultimate safe haven amid a protracted Russia-Ukraine war-led elevated inflation levels, which are now flagging risks of a recession. The flight to safety theme dominates despite the upsurge in the US Treasury yields across the curve, as markets seem to have already priced in a 50-bps May Fed rate hike.
Also read: Chart of the Week, Gold: XAU/USD on verge of a 38.25% Fibo correctionMeanwhile, investors shrug off the upbeat Chinese Q1 2022 GDP figures, with the YoY rate beating estimates with 4.8%. China’s covid lockdowns and a potential European Union (EU) embargo on Russian gas could likely intensify inflation and growth concerns, boding well for Gold Price. However, holiday-thinned market conditions and Fedspeak will influence the gold price action in the sessions ahead.
In the American session, investors will focus on the speech from the St. Louis Fed President and FOMC member James Bullard, which will provide insights into the likely monetary policy action by the Fed. However, the mega event will be the speech from Fed Chair Jerome Powell, which is due later this week.
”We are of the view that the Fed is broadly in-sync with the move toward the vicinity of neutral by the end of 2022, with Governor Brainard supporting that view recently. Chair Powell’s remarks in an IMF panel on the global economy will get the focus of the attention,” analysts at TD Securities explained.
”While the Fed is signalling its intent to reach neutrality by year-end, and to start an aggressive QT regime, outflows from gold markets have been scarce as participants are happy to retain some optionality against the Fed’s stated plan amid growth concerns,” the analysts added.
Meanwhile, as day 50 of the Ukraine crisis was surpassed, there are still no signs of progress in peace talks between the two nations. Reuters reported that the Ukrainian Foreign Minister Dmytro Kuleba said there had not been any recent diplomatic communications between Russia and Ukraine at the level of their foreign ministries and that the situation in the port of Mariupol, which he described as “dire”, may be a “red line” in the path of negotiations.
Gold Technical Analysis
The bulls are in control and taking on fresh highs. On a daily scale, XAU/USD has tested the breakout of its previous critical level at March 24 high $1,966.18 multiple times. The 20- and 50-Exponential Moving Averages (EMAs) are scaling higher, adding to the upside filters. The momentum oscillator Relative Strength Index (RSI) (14) has overstepped 60.00, which indicates a firmer bullish momentum going forward.
AUD/USD drops towards 0.7350 on mixed Chinese data, risk-aversion.AUD/USD is dropping towards 0.7350 on mixed Chinese economic data, with the Q1 GDP numbers outpacing estimates. The pair is in a significantly strong downtrend amid a firmer US dollar and broad risk-aversion. However, given it is Easter Monday, there perhaps will not be much in the way of price action.
EUR/USD: Bears in control, but weekly M-formation is menacing.The euro is bobbing along the bottom of the bear cycle range and likely has more to go to the downside in order to mitigate the imbalance left behind from the March 2020 rally down in the 106 areas. The M-formation on the weekly chart contradicts the bearish bias.
Gold hits five-week highs as Easter Monday sees flight to safety.Gold Price eyes an upside to recapture $2,000 amid a flight to safety. Elevated inflation, recession risks and the Russia-Ukraine war boost safe-haven appeal. The speech from Fed Chair Jerome Powell will keep investors busy this week.
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