- Gold price receives moves higher on Friday and approaches a multi-week high again.
- Worries about a global banking crisis seem to benefit the safe-haven yellow metal.
- Expectations for a less hawkish Federal Reserve and a weaker US dollar also support XAU/USD.
The price of gold (XAU/USD) recovers some positive traction after the good price movements in both directions of the previous day and maintains its buying tone during the European session on Friday. XAU/USD is currently just above the $1,930 levelup more than 0.60% on the day, and remains within striking distance of the six-week highs hit on Monday.
Banking crisis woes continue to benefit gold price
Despite multi-billion dollar life preservers for troubled banks in the United States (US) and Europe, concerns over widespread contagion continue to drive some safe-haven flows and benefiting the price of gold. It is worth mentioning that The big US banks came to the rescue of First Republic Bank on Thursday, which was in trouble, and injected 30,000 million dollars into the credit institution based in California, San Francisco. This followed the Credit Suisse announcement that it will exercise a borrowing option of up to $54 billion from the Swiss National Bank (SNB) to shore up liquidity. However, these developments do not boost investor confidence or ease fears of a full-blown global banking crisis, as evidenced by the prevailing caution in the markets.
Expectations for a less aggressive Federal Reserve and a weaker dollar are also supportive
In addition, the bankruptcy last week of two mid-size US banks –Silicon Valley Bank and Signature Bank– forced traders to reduce expectations of more aggressive interest rate hikes by the Federal Reserve (Fed). In fact, the markets now value at almost 90% the possibility of a rise of less than 25 basis points at the next meeting of the Federal Open Market Committee (FOMC) on March 21 and 22. This, in turn, leads to a modest drop in US Treasury yields and provides additional support to the non-yielding gold price. Meanwhile, expectations of a less aggressive Fed prompt further selling around the US dollarwhich turns out to be another factor acting as a tailwind for the price of gold, denominated in US dollars.
The price of gold is about to post the biggest weekly gains since mid-November.
The aforementioned fundamental background suggests that the path of least resistance for the gold price is up. However, XAU/USD remains on track for its biggest weekly gain since mid-November and seems poised to prolong the recent appreciation movement seen in the last two weeks or so. Market participants are now awaiting the release of the US Michigan Consumer Sentiment Index for some momentum during the American session on Friday. However, attention will remain focused on the two-day FOMC meeting, which begins next Tuesday.
Gold Price Technical Outlook
From a technical point of view, any subsequent movement that exceeds the zone of $1,937-$1,938or the weekly high, will likely face some resistance near the multi-month high, around the $1,959-$1,960 Played in February. Continuation buying will be seen as a new trigger for bulls and will allow the gold price to try to recover the psychological level of the bulls. $2,000.
On the other hand, the immediate support is located near the horizontal zone of $1,920-$1,918ahead of the previous day’s low of around $1,908-$1,907. Below is the round level of $1,900which if broken could trigger some technical selling and drag XAU/USD into the trading zone. $1,886-$1,885 on his way to support $1,872-$1,871or the weekly minimum established on Monday.
Gold Key Levels to Watch
|Last price today||1932.44|
|daily change today||12.93|
|today’s daily variation||0.67|
|today’s daily opening||1919.51|
|previous daily high||1933.51|
|previous daily low||1907.56|
|Previous Weekly High||1870.09|
|previous weekly low||1809.46|
|Previous Monthly High||1959.8|
|Previous monthly minimum||1804.76|
|Fibonacci daily 38.2||1923.6|
|Fibonacci 61.8% daily||1917.47|
|Daily Pivot Point S1||1906.88|
|Daily Pivot Point S2||1894.24|
|Daily Pivot Point S3||1880.93|
|Daily Pivot Point R1||1932.83|
|Daily Pivot Point R2||1946.14|
|Daily Pivot Point R3||1958.78|
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.