In Monday’s European session, the price of gold (XAUUSD) creeps up to $1,993, renewing the yearly high, erasing the losses of the Asian session despite new risks to risk appetite.
World central banks’ initiatives to inject US Dollar liquidity, as well as the prior UBS-Credit Suisse merger, encouraged a risk-on environment.
It’s important to note that throughout the most recent period of widespread weakening in US Treasury bond rates and the US Dollar, the metal increased the most both daily and weekly. Notwithstanding the efforts of the main central banks and private banks, the recent run-up in the price of yellow metal may be related to worries about a collapse of the financial industry. Fears of further rate increases and the unfavorable effects of a merger between Credit Suisse and UBS are other factors that are undermining the attitude.
Having stated that, information on the main central banks’ joint efforts the news that UBS would acquire the struggling Credit Suisse helped to provide market liquidity and support a mood improvement during the early Asian session.
Credit Suisse bondholders’ woes and a cautious mindset ahead of top-tier data/events weigh on sentiment.
Nevertheless, the UBS-Credit Suisse deal’s specifics imply losses for the holders of Credit Suisse AT1 bonds, which in turn questioned the tentative optimism. The interest rate futures that predict imminent hawkish moves from the important central bank are located on the same line. It should be highlighted that worries about further damage to the banking sector also affect US Treasury bond yields and cause the gold price to be steady.
In light of this, the S&P 500 Futures reverse the week’s early gains. While the yields on US 10-year and 2-year Treasury bonds drop to multi-day lows. the day before. It’s important to note that while the 10-year counterpart fell the most since early January. The two-year Treasury bond rates in the United States had their worst weekly decline in three years.
Looking forward, bond market movements and risk triggers may provide. Gold traders with entertainment before to the monetary policy meetings of the Federal Reserve (Fed), Swiss National Bank (SNB), and Bank of England (BoE). The major economies’ initial estimates of activity levels for the month of March will be crucial to follow.
Gold(XAUUSD) Technical Analysis
Early Monday, gold investors took a respite as the RSI (14) became overbought. Nevertheless, the retreat moves failed to breach the prior resistance level from March 13. Which was close to $1,965 at the time of publication.
As a result, the XAUUSD continues within a one-week-old bullish trend channel with positive MACD indications.
As a result, the metal’s potential to surpass the Year-To-Date high cannot be ruled out.
Nonetheless, the top line of the indicated bullish channel and the April 2022 high, both between $1,996 and $1,998, will precede the $2,000 psychological magnet to test Gold purchasers.
Following that, a return to the previous yearly high of around $2,070 cannot be ruled out.
However, pullback moves require validation from the $1,965 level. But the gold seller may feel relieved only if the price falls below that level. If the XAUUSD price stays negative above the $1,942-40 support confluence. Which includes the bottom line of the aforementioned channel and the 50-Hour Moving Average (HMA).
