- Gold spot prices are consolidating at the lows of $ 1,745, close to the DMA of 21 which is currently just above $ 1,740.
- Next week, the key drivers for gold will be speeches by Fed members, preliminary Markit PMIs and core PCE inflation.
Gold Spot Prices (XAU / USD) They are consolidating at lows of $ 1,745, close to the 21-day moving average that currently sits just above $ 1,740. Overall, prices have held well above the $ 1,730 level, amid a lack of real fundamental drivers throughout the day, as well as relatively subdued price action in currency markets (USD is flat ) and bond markets (yields on US 10-year bonds are flat). On the day, it appears that gold will close with gains of around a quarter of a percentage or up about $ 5, which translated into modest gains for the week of around 0.8% or just under $ 15.
Next week, the main fundamental drivers for gold will be speeches from the Fed, including Fed Chairman Jerome Powell speaking three separate times, as well as comments from Fed Vice Chairman Richard Clarida and Chairman of the New York Fed, John Williams. Markit’s preliminary PMI for the month of March (to be released on Wednesday) and February’s core PCE inflation data (the Fed’s favorite inflation gauge will also be worth looking at). Ultimately, what happens to the USD and actual returns are likely to determine where the gold goes; if both continue to rise, that could spell pain for gold, although if inflation expectations continue to rise, this could be supportive.
Technical remarks
This week’s price action has confirmed that spot gold is consolidating within a bearish pennant; To the upside, an uptrend linking the March 4, 11 and 18 highs has been restraining price action, while to the downside, an uptrend linking the March 5, 12 and 18 lows has been supporting price action. Typically, such structures occur when an asset is consolidating after recent losses, with a breakdown of the pennant acting as the sell signal for a further decline; Such a sell signal could be triggered by a break below $ 1,720 – $ 1,730 and could open the door for a decline to the psychologically important level of $ 1,700 and an eventual drop to monthly lows of around $ 1,680.
Four hour chart
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
