Category: XAUUSD

Gold Price Analysis — January 20

Gold Price Analysis — January 20

Gold (XAU/USD) etched higher in the early European session on Wednesday, reaching a four-day high of around $1857 over the past few hours. The uptick appears to have been triggered by its recent foray into the $1800 support. The US dollar continued on its descent, which tends to favor the dollar-denominated commodity.

Meanwhile, it appears that investors across markets are now treading cautiously ahead of President-elect Joe Biden’s inaugural ceremony later today. This cautious stance has likely extended additional support for gold’s safe-haven status.

The US Treasury Secretary nominee Janet Yellen boosted hopes for additional stimulus measures in the US during her confirmation hearing on Tuesday, as she urged lawmakers to be generous on the COVID-19 relief package.

However, expectations of a more aggressive government spending in 2021 might continue to bolster the US Treasury bond yields and cap any significant rally in the non-yielding commodity. Also, the optimism over the rollout of coronavirus vaccines could further prevent investors from placing aggressive bullish bets on the XAU/USD.

That said, subsequent bullish spikes could be perceived as selling opportunities, warranting some trading caution around gold.

XAUUSD – Hourly Chart

Gold (XAU) Value Forecast — January 20

XAU/USD Major Bias: Bullish

Supply Levels: $1860, $1880, and $1894

Demand Levels: $1850, $1838, and $1830

As stated earlier, gold has facilitated a steady climb from its recent descent to the $1800 area. However, the commodity is experiencing a hard time getting back into the $1860 – $1894 pivot zone, despite several attempts. That said, we expect to see a slight correction in the coming hours near the $1845 area, where dip-buyers will likely come on board and take the price higher.

A sustained break of the $1860 pivot point could open the doors for the commodity to shoot for the $1900 round figure once again.

Note: Learn2.Trade is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results.

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Last Updated: January 20th, 2021

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Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.

Gold Price Analysis — January 18

Gold Price Analysis — January 18

Gold (XAU/USD) remains under heavy selling pressure, as it records a second consecutive weekly decline amid a healthy rebound in the US dollar (DXY), which tends to undermine demand for the yellow metal.

The greenback’s recovery was sponsored by the recently proposed $1.9 trillion stimulus measure by President-elect Joe Biden and an impressive rally in the US Treasury yields.

It’s worth mentioning that gold has been under immense pressure all through January amid the growing demand for the USD as a safe-haven currency, despite recent dovish statements by US Federal Reserve Chair Jerome Powell, stating that that interest rates will continue to remain at floor level for as long as necessary.

Also, the US Treasury bond yields are expected to keep rallying in the meantime, which is exerting additional prospects of the non-yielding commodity.

Meanwhile, it appears that gold traders are split across those looking for long-term buying opportunities on the safe-haven asset amid rising inflation and massive quantitative easing measures, or those looking for arbitrary selling opportunities on the backdrop of a recovering USD and rising cases of coronavirus infections in Western Europe and the US.

Moving on, gold’s price dynamics today will be largely determined by the price action of the USD, amid the absence of market-moving data from the US.

XAUUSD – Hourly Chart

Gold (XAU) Value Forecast — January 18

XAU/USD Major Bias: Bearish

Supply Levels: $1838, $1850, and $1860

Demand Levels: $1818, $1808, and $1800

Gold continues to trade on a backfoot, as speculators begin to anticipate an $1800 price tag for the commodity soon. The precious metal fell below the $1808 support line in the early Asian session today but has since recovered amid a lack of follow-through strength.

The commodity needs a sustained break above the $1860 pivot zone, at least, to shake off the lingering selling pressure. Failure to take the $1860 resistance over the coming days could accelerate gold’s descent to the $1800 level.

Note: Learn2.Trade is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results.

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Last Updated: January 18th, 2021

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Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.

Gold Price Declines As Incoming US Administration Plans $2 Trillion Stimulus

Gold Price Declines As Incoming US Administration Plans $2 Trillion Stimulus

Despite the decline in US yields, the US dollar still appreciated. That was enough for gold to drop 0.45% to $1,845.00 an ounce. Traders are also nervous: today, gold fell another 0.40% to $1,838.00 an ounce.

The new US administration, led by President-elect Joe Biden, is expected to unveil a massive Covid-19 relief package worth about $2 trillion on Friday, citing two people who were briefed on the discussions.

His advisers recently told allies in Congress that they expect a target price of $2 trillion, up to $700 billion from the $1.3 trillion packages that Schumer requested at auction in New York late Wednesday.

The fact that gold fell is an ominous development, even though the yield on US 10-year bonds also declined. If the yield on US 10-year bonds reverses course and begins to rise again, reducing the negative pass-through in real yields, gold could experience another sustained selling spurt. A US stimulus package of $1.5-2.0 trillion may be enough to tip the scales.
Further Rally on Gold Not Ruled Out
Investors reduced their open interest positions by almost 4 thousand contracts on the previous day, changing the previous construction according to preliminary data from CME Group. On the other hand, the volumes changed two drops in a row and increased by almost 4.9 thousand contracts.

The negative behavior of gold prices on the previous day was caused by a reduction in open interest, which robbed some of the forces of a deeper pullback and made possible further consolidation shortly.

In the above report, gold quickly dropped by about $20 to $1,832 as the sell-off in US Treasuries triggered a 2% jump in 10-year Treasury yields, triggering a new rebound in the US dollar index.

The yellow metal is currently gaining momentum as market participants await Powell’s Fed speech. The recent rise in US bond yields and speculation about what the central bank will do in the next meeting make Powell’s words more interesting.

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Last Updated: January 14th, 2021

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Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.

Gold Price Analysis — January 13

Gold Price Analysis — January 13

Gold (XAU/USD) traded on a directionless bias through the early European session, as it remained range-bound. The yellow metal was last spotted trading around the $1855 level.

The prevailing drawdown in the US Treasury bond yields kept the pressure on the US dollar (DXY), which extended support to the dollar-denominated commodity. The US bond yields retreated from a recent bull run overnight. Also, the Fed announced that its monetary policy will remain accommodative, which provided extra support to the non-yielding metal.

The recent Democratic win at the US Senate runoff in Georgia bolstered investors’ expectation over larger stimulus measures from the Biden administration, which triggered a selloff in the 10-year US government bond yield yesterday.

Nonetheless, these bolstering factors failed to provide meaningful gains for gold, considering the underlying risk mood across markets. The rollout of vaccines for the highly-contagious COVID-19 also helped bolster investors’ sentiment for a strong global economic recovery.

Moving on, market participants will be looking at the US economic docket today—which features the release of the latest consumer inflation figures—for clues. This data, coupled with the US bond yields, will influence the USD price dynamics today.

XAUUSD – Hourly Chart

Gold (XAU) Value Forecast — January 13

XAU/USD Major Bias: Sideways

Supply Levels: $1860, $1880, and $1893

Demand Levels: $1850, $1838, and $1818

Gold bulls continue to put up a good fight against bears, who are relentlessly trying to take price lower. The commodity has been range-bound between the $1860 pivot point to the $1843 support.

Meanwhile, the commodity is steadily trading in an upward pattern as it aims to get back into the $1893 – $1860 pivot zone. In the meantime, the $1850 support will likely continue to bolster the commodity against any sustained decline.

Note: Learn2.Trade is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results.

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Last Updated: January 13th, 2021

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Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.

Gold Price Analysis — January 11

Gold Price Analysis — January 11

Gold (XAU/USD) traded with on a bullish momentum in the early European session on Monday, as it rebounded by over $35 from a low level not seen since early December last year.

The intraday rebound was triggered by the risk-averse mood sweeping across markets, which tends to bolster demand for the precious metal.

Growing concerns over the worsening state of Coronavirus numbers globally and the imposition of renewed lockdown measures across Europe and China dampened investors’ risk mood. This risk-off flight was evident in the equity markets.

Nonetheless, the bullish tone surrounding the US dollar (DXY) could cap any further gains for the dollar-denominated in the meantime. The greenback got adequate support from the prevailing rally in the US Treasury bond yields.

Meanwhile, investors have been slowly pricing-in the possibility of a more pronounced US fiscal spending in 2021, including direct stimulus payments and hefty infrastructure spending. The downbeat NFP reports on Friday further strengthened this speculation and boosted the US Treasury bond yields to a 10-month high.

That said, it is advisable to avoid taking aggressive bets at the moment and wait for a sustained directional move. The market will be dictated by the broader market risk sentiment and the USD price dynamics, considering the absence of any market-moving economic releases today.

XAUUSD – Hourly Chart

Gold (XAU) Value Forecast — January 11

XAU/USD Major Bias: Bullish

Supply Levels: $1859, $1880, and $1893

Demand Levels: $1842, $1823, and $1808

Following the devastating decline from last week, gold is now picking up the pieces and is making meaningful strides to get back into the $1859 – $1893 pivot zone and subsequently into the ascending channel.

That said, we expect the precious metal to stage a steady recovery near the $1880 in the coming hours and days.

Note: Learn2.Trade is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results.

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Author : Azeez Mustapha

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Last Updated: January 11th, 2021

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Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.

Gold Price Analysis — January 6

Gold Price Analysis — January 6

Gold (XAU/USD) traded on a sideways pattern in the early European session on Tuesday, as the commodity struggled to capitalize on its bullish momentum from the previous two sessions.

It appears that the market has begun pricing in the possibility of a Democratic win in the crucial US Senate runoff elections in Georgia. The final election results will not be out until the end of today, albeit with the increasing likelihood of a Democrat-controlled Senate.

A Democrat-controlled senate will give President Joe Biden easier access to his preferred economic policies, including additional—and possibly larger—stimulus measures and infrastructure projects. This possibility has caused the US dollar (DXY) to come under immense pressure, thereby extending further support to the dollar-denominated commodity. Also, the prospects of stricter regulations for large tech companies—and the industry as a whole—caused the Nasdaq futures to slide by nearly 2%, which bolstered gold even further.

Meanwhile, the 10-year US Treasury yield rose beyond 1% for the first time since March on the expectations of larger government borrowing. This rise is probably the only factor capping gains for the non-yielding metal. Also, investors are hesitant to place any aggressive bets ahead of the FOMC minutes scheduled for later today.

In the meantime, the greenback’s price dynamics and the broader market risk sentiment will provide trading opportunities for the precious metal.

XAUUSD – 4-Hour Chart

Gold (XAU) Value Forecast — January 6

XAU/USD Major Bias: Bearish

Supply Levels: $1950, $1965, and $1980

Demand Levels: $1920, $1907, and $1900

At press time, gold appears to be stalling near the top of our ascending channel as bullish momentum dwindles. That said, we expect a sharp price correction in the near-term to the lower-$1900 area.

Our 4-hour MACD indicator pronounces the impending correction even better, as the commodity retreats from overbought territories.

Note: Learn2.Trade is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results.

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Last Updated: January 6th, 2021

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Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.

Gold Price Analysis — January 4

Gold Price Analysis — January 4

Near-zero interest rates and a bolstered economic outlook amid improving COVID-19 vaccine rollout has caused the US dollar (DXY) to slide even further, boosting demand for gold (XAU/USD).

China’s Renminbi grew by about 1% in the early Asain session on Monday, as the USD/CNY falls below a 30-month low for the first time. The Chinese Renminbi gained against the dollar despite dwindling manufacturing activities. The Caixin/Markit Manufacturing PMI report for December fell below speculators’ expectations. Nonetheless, economic activities in the second-largest economy are in full swing as other developed economies continue to combat the spread of the virus with renewed lockdown restrictions.

In other news, Georgia’s Senate runoff elections, scheduled to hold on Tuesday, will be crucial for the dollar, considering that a Democrat win of both senate seats could trigger additional stimulus for US citizens. That said, easing programs by the US government always has negative impacts on the greenback.

Meanwhile, gold has begun the new year on a very bullish note. At press time, the precious metal is trading up at +1.8%, with a daily—and YTD—high of $1936. Several factors will likely keep providing adequate support for the yellow metal in the coming weeks and months. Further lockdown restrictions across the globe as Covid cases continue to rise and additional easing measures by central banks are some of the bolstering factors for gold in the near-term.

That said, many speculators are now placing their expectations on a break of the highly-coveted $2000 price tag in the coming months.

XAUUSD – Hourly Chart

Gold (XAU) Value Forecast — January 4

XAU/USD Major Bias: Bullish

Supply Levels: $1940, $1950, and $1965

Demand Levels: $1920, $1907, and $1900

The XAU/USD is currently trading in a bullish momentum up our hourly channel, following a clean bounce off the $1885 level as previously predicted. We expect the commodity to continue upwards towards the $1950, at least, as $2000 is expected to come into play soon.

However, the precious metal has ventured into overbought conditions, making a modest pullback to the lower-$1900 in the near-term likely.

Note: Learn2.Trade is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results.

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Last Updated: January 4th, 2021

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Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.

Gold Price Analysis — December 30

Gold Price Analysis — December 30

Gold (XAU/USD) continued its sideways journey in the early European session on Wednesday, as the commodity is locked in a battle with the $1880 price point.

The yellow metal could not capitalize on last week’s goodish bounce to the $1900 psychological figure amid the flourishing upbeat market risk mood. The global sentiment got more bolstering from the recent announcement that UK regulators have approved the use of AstraZeneca/Oxford Coronavirus vaccine.

Additionally, hopes for another round of US financial aid and growing expectations of a strong global economic recovery in 2021 lent further to the prevailing risk-on appetite. This risk sentiment was seen as one of the crucial factors undermining demand for traditional safe-haven assets, including gold.

Meanwhile, the ongoing flight from the US dollar (DXY) offered some support to the dollar-denominated commodity and has forestalled any sharp decline. The greenback came under renewed pressure after Senate Majority Leader Mitch McConnell blocked efforts to bring up COVID-19 relief payments to $2,000 from the initially proposed $600.

Market participants will now be looking at the US economic data today–which features the Goods Trade Balance, Chicago PMI, and Pending Home Sales–for trading clues. This data release, coupled with the broader market risk sentiment, could influence the dollar’s price dynamics, which would inadvertently affect the XAU/USD.

XAUUSD – 4-Hour Chart

Gold (XAU) Value Forecast — December 30

XAU/USD Major Bias: Sideways

Supply Levels: $1893, $1900, and $1907

Demand Levels: $1876, $1865, and $1859

Gold remains solidly in consolidation mode between the $1893 – $1859 pivot zones. However, the commodity appears to also be consistent with the prevailing ascending channel, as it continues to record higher lows. This factor is a good indication that bulls are still in control, albeit with little action.

That said, we expect the precious metal to continue proceeding with our upward-facing channel in the coming hours and days. A fall from this level could get repelled by the $1859 pivot point and, subsequently, by the $1850 support.

Note: Learn2.Trade is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results.

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Last Updated: December 30th, 2020

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Gold Price Analysis — December 28

Gold Price Analysis — December 28

Gold (XAU/USD) has renewed its daily lows in the early European session, although it lacked any follow-through strength. The precious metal is currently trading around $1885 after reaching a daily low of $1877 a few hours ago.

The downward pressure on the US dollar (DXY) increased on the first day of the week, following President Donald Trump’s approval of a $2.3 trillion COVID-19 relief and government funding bill. This factor was responsible for the modest lift seen in the Asian session on Monday. However, the bullish jump lacked any follow-through strength and was strongly resisted by the $1900 psychological level.

The US stimulus announcement added to the recent Brexit optimism and bolstered investors’ risk appetite. This risk boost was evident in the equity markets, which dampened demand for the XAU/USD.

The current uncertain market mood makes it prudent for investors to stay on the sidelines and wait for a sustained move in either direction amid the holiday-induced liquidity shortage.

Meanwhile, the absence of any market-moving economic data releases from the US gold’s price dynamics at the mercy of the greenback. Additionally, fresh developments surrounding the COVID-19 pandemic could provide further influence on the yellow metal’s short-term price action.

XAUUSD – 4-Hour Chart

XAU/USD Major Bias: Sideways

Supply Levels: $1887, $1900, and $1907

Demand Levels: $1876, $1865, and $1859

Gold has resumed the new week after the Christmas break in a choppy momentum. Following a sharp rally to the $1900 resistance, the yellow metal has fallen back to the $1880s. That said, further declines from this level should be capped by the $1870 mark, given that that level is the base of our 4-hour ascending trendline.

A sustained break to the upside will only be possible if the commodity snaps the $1900 barrier. Failure to do so could keep it in its consolidation range between $1893 and $1859.

Note: Learn2.Trade is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results.

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Last Updated: December 28th, 2020

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Annual Forecast for Gold (2021): Expect a Boom

Annual Forecast for Gold (2021): Expect a Boom

Gold (XAU/USD) began 2020 a few dollars above $1,500 and rose to $1,700 by the end of February. The selling pressure surrounding the US dollar (DXY) was responsible for this rally. The dovish stance in the US Fed monetary policy in the second half of 2019 caused the greenback to slide against other financial assets.

However, everything changed abruptly following the discovery of a deadly new virus that originated in Wuhan, China, which spread across the globe rapidly and triggered a global economic crisis. Currently, the virus has infected more than 78,475,000 people and has led to the death of more than 1.7 million worldwide.

With countries under pressure to shut down their economies and impose lockdown restrictions to try to slow the spread of the virus, a dramatic need to flee to safe-haven assets by investors took over the financial space. This market action propped-up demand for gold and caused the US Treasury bond yields to slide by about 50% in just a few weeks.

However, in late March, the greenback got a boost from the pressure built up in offshore USD markets and rose to its highest level in three years (103), while the yellow metal fell to a fresh 2020 low around $1,450. Shortly after, gold recovered to the $1,600 level. Over the months, gold ascended to the upper-$2,000 area for the first time in history, as the pandemic-induced financial crisis worsened and appetite for safe-haven assets soared.

Sadly for gold, several COVID-19 vaccine makers began announcing positive reports on their vaccine development in early November. Since then, the precious metal has struggled to find demand as economies start to open up or ease lockdown restrictions.

Gold Price Outlook for 2021

Despite the newly-found liquidity rushing into the financial markets, the inflation outlook in some of the largest global economies remains dampened, while several central banks are still devoted to keeping their policies dovish well into 2021 and beyond until a full economic recovery gets recorded. This means that investors will keep running to gold for safety soon.

XAUUSD – Weekly Chart

Gold (XAU) Technical Outlook — 2021

XAU/USD 2021 Bias: Bullish

Supply Levels: $1965, $2000, and $2076

Demand Levels: $1800, $1787, and $1673

On the weekly chart, we see a clear picture of how bullish gold was in 2020, despite the risk-on boost seen in November. That said, the commodity’s current pullback could send it to the lower-$1,800 area in the coming weeks. A foray to the $1,800’s should see strong demand from investors, which could take XAU/USD back to the $2,000 psychological resistance.

Meanwhile, our price prediction for gold in 2021 falls within the range of $2,250 – $2,300, considering that many economies will likely remain in a battle with the pandemic till 2022.

XAUUSD – 4-Hour Chart

In the meantime, the non-yielding metal is in consolidation following its fall from the $1900 psychological figure on the 21st of December. This consolidation between the $1860 and the $1900 levels will likely continue through the remainder of 2020, after which a decline to $1800 could be seen.

Note: Learn2.Trade is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results.

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Author : Azeez Mustapha

Article Info

Author: Azeez Mustapha

Last Updated: December 23rd, 2020

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Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.