On Friday, the price of gold has been trading aimlessly as bulls take a break from the recent ferocious run. In anticipation of the US S&P Global Manufacturing and Services PMI data’s preliminary publication. The United States Dollar (USD) is consolidating its recent rebound. In light of the current banking sector crisis. The price of gold has entered a phase of upward consolidation just below the $2,000 level.
Markets are cautious and US Treasury bond rates are down, the US dollar clings to its comeback gains.
Traders are anticipating the preliminary S&P Global business PMIs from the economies of the Euro region and the United States. Markets are still uneasy due to worries surrounding the global banking sector. Which has helped the US Dollar bulls gain some ground but resulted in prolonged weakening in US Treasury bond rates. Due to the dovish US Federal Reserve (Fed) policy. “The Eurozone Manufacturing PMI is projected at 49, up from the previous 48.5,”. The services index is seen at 52.5, down from 52.7 in February. German indices are predicted to be 47 and 51, up somewhat from the figures from the previous month. Eventually, only the Services PMI remains over the 50-point level, with both United States indices viewed below their final February values.
“Dismal numbers won’t come as a surprise, but market participants will focus on the magnitude of the loss. Risk aversion will likely be sparked by significantly worse-than-expected results, and the US Dollar will profit from profit-taking before the weekend.
On the other side, positive data will reinforce current optimism and drive down the value of the dollar. Despite the fact that the data provides support for the struggling US Dollar, an upward trend in gold prices is still likely given a positive daily technical setup.
Gold Technical Analysis
After closing above the descending trendline barrier on Thursday at $1,975, the price of gold finally verified a bull flag breakout.
So, should gold bulls produce a sustained break of the $2,000 barrier, the doors remain open for a test of the annual high at $2,010.
The psychological level of $2,050 is considered to be the next significant upward barrier. Giving support to the positive. The 14-day Relative Strength Index (RSI), which is slightly below overbought territory, is trading stronger above the midline.
Also, the somewhat solid 50 DMA has been breached to the higher by the bullish 21-Daily Moving Average (DMA).
If a bullish crossover is confirmed on a daily closing basis, the positive momentum in the price of gold will be strengthened.
The bull flag resistance-turned-support level at $1,967 will be challenged if the gold price falls below the first support level at $1,980 round. The $1,950 demand range is where gold purchasers view their final line of defense.
