After briefly reaching an all-time high (~$2222.85) following the Fed’s dovish commentary XAUUSD has retreated towards $2170.
The retreat comes amid strengthening US dollar as the lower-than-expected Initial jobless claims reading posted on Thursday indicated a potential upbeat of the US labor market.Declining jobless claims numbers may contribute to the Fed’s decision to keep the interest rates elevated for a longer period of time.
Higher for longer interest rates could extend downward pressure on gold prices as investors may seek higher yields from interest-bearing assets.
Geopolitical risks are still at play with any sudden developments in the Middle East having the potential to significantly affect the bullion prices.
On the demand side …The world’s largest gold ETF (“SPDR Gold Shares”) has gained 1.2% (~$690.7 million) in total net asset value (Mar18 – Mar 21), bringing the total up to $58.5 billion.
On the technical side …
Trading above the key simple moving averages (21, 50 & 100-period SMAs) underscores XAUUSD’s bullish momentum.To the downside, the immediate resistance level is located at $2152.00 (this week’s low). Moving below it could drag the gold price down towards the next support level at 21-period SMA.To the upside ~2190.45 is set to act as an immediate resistance level. According to Bloomberg’s model, there is a 76% chance for XAUUSD to trade within $2130.13-$2209.48 during the next seven days.RSI (64.64) is neither in the overbought (>70) or in the oversold (<30) condition. More By This Author:BRN Has Slightly Rebounded, Trading Above $85/bbl Ethereum, Is The Pullback Over? USDJPY Jumps Above 150 Following The BoJ’s Interest Rate Decision
