Gold price is locked. beginning of a hectic week. Following a period of ranging trades, the cost of gold seems ready for activity this week.
Gold, US Dollar, FOMC, Fed, Treasury Yields in View
An FOMC meeting and a critical week of US indicators are approaching as gold prices remain stable.
Market attention will be on the FOMC meeting, however, ISM and non-farm payroll data will also be widely monitored. A 25 basis point rise in the target rate on Wednesday has essentially been factored in by the interest rate market.
Economic Activity Schedule
The market has almost entirely disregarded predictions for more raises. And rate investors are anticipating possible cuts at the end of the year. Therefore, the post-FOMC press conference may have some impact.
The effect of Wednesday’s decision may be greater for gold depending on how the yield curve reacts. Both nominal and actual yields have rebounded heading into this week after declining last week.
Treasury yields
The market-priced inflation rate is determined by Treasury inflation-protected securities (TIPS). With a similar term minus the nominal yield equals the actual yield.
The 10-year real yield was as low as 1.13% early prior week before rising to 1.36% on Friday. At the time of being issued today, it is now trading slightly around 1.30%.
It had reached a seven-week top at the time, but there was little association with gold. With the price staying within the US$ 1,969–2,049 bands, it had been in over the previous month.
The price of gold may be significantly impacted by changes in the real yield on Treasury bonds. Because it is a quasi-interest-bearing asset.
Real yields have been moving in no specific direction lately. This has left the DXY stuck in a range as well.
The US Dollar index as a whole and XAUUSD have been moving in circles, which has caused gold volatility to keep falling.
The SVB failure and worries about the US banking industry caused it to spike higher. Although the swing lower may represent an investor’s acceptance of gold’s average higher prices.
The greenback’ and XAUUSD may shift further after this week’s Fed meeting, which could act as a trigger.
Technical analysis of gold
The price of gold has been stabilizing over the last week in a constrained range of $1,971-2,021. As traders waiting for the Fed to make an explicit choice about its monetary policy. The March 22 bottom of the ascending trendline at $1,934.34 is providing support for the Gold bulls.
A poor showing is indicated by the 20-period Exponential Moving Average (EMA) at $1,990.28, which is sticking to the price of gold.
The negative impulse will be sparked by the Relative Strength Index (RSI) (14) about to enter the bearish zone of 20.00-40.00.
Pivots (Daily)
| Name | S3 | S2 | S1 | Pivot Points | R1 | R2 | R3 |
| Classic | 1988.36 | 1991.83 | 1993.71 | 1997.18 | 1999.06 | 2002.53 | 2004.41 |
| Fibonacci | 1991.83 | 1993.87 | 1995.14 | 1997.18 | 1999.22 | 2000.49 | 2002.53 |
| Camarilla | 1994.13 | 1994.62 | 1995.11 | 1997.18 | 1996.09 | 1996.58 | 1997.07 |
| Woodie’s | 1987.58 | 1991.44 | 1992.93 | 1996.79 | 1998.28 | 2002.14 | 2003.63 |
| DeMark’s | – | – | 1992.77 | 1996.71 | 1998.12 | – |
Key Points
While the USD Index is recovering, it is anticipated that the gold price will exhibit severe weakness beneath $1,970.00.
The attractiveness of gold as a safe haven has decreased as US financial concerns have subsided.
While the US ISM Manufacturing PMI data will be released, the USD Index will continue to be active.
