Technical Analysis

GOLD Price Analysis – April 07, 2023

By LonghornFX Technical Analysis
Apr 7, 20233 min

Daily Price Outlook

In European trading, gold prices dropped for the first time in four days, moving away from 13-month highs due to profit-taking and investor reluctance to establish new positions ahead of the US payrolls data release.

The US payrolls report, set to be released tomorrow, will reveal the number of new jobs added to the economy, as well as updates on unemployment and wage statistics.

Gold prices slipped by 0.6% to $2,008 an ounce, after a 0.1% increase yesterday, reaching a 13-month peak at $2,032. This week, gold prices have risen by over 0.2% in response to the unexpected OPEC+ production cut and weak US data.

Recent US figures indicated that fewer jobs were added in the private sector than anticipated in March, while the services sector also experienced a slowdown during the same month.

US job opportunities in February plummeted to a two-year low, while manufacturing fell to a three-year low, signaling a possible recession in Q1.

US Interest Rates

Following the data release, the probability of no policy changes at the Federal Reserve's May meeting is at 60%, while the likelihood of a 0.25% rate hike has dropped to 40%.

Investors now anticipate a rate cut by the Federal Reserve in September, with a final interest rate of 4.25% in December.

The Jobs Data

Investors are now awaiting the critical US payrolls data on Friday to assess the economy's health and determine the Federal Reserve's next steps.

Fed Comments

Cleveland Fed President Loretta Mester stated that it is still too early to determine whether the Fed will increase interest rates in May. Gold holdings at the SPDR Gold Trust saw a 0.87-ton increase yesterday, reaching a total of 930.91 tons, the highest level since October 2022.

 Gold Price Chart - Source: Tradingview

Gold (XAU/USD) – Technical Outlook

Gold prices approached our anticipated target of $2,040 and experienced a bearish bounce, testing the support level formed above $2,010 while maintaining stability above it. Notably, the stochastic oscillator is shedding its negative momentum, and the 50-day Exponential Moving Average (EMA50) continues to offer positive support to the price.

Consequently, we expect positive trading today as the primary bullish trend resumes within the upward channel depicted on the chart. It is important to note that our targets start at $2,040 and extend to $2,065. However, a break below $2,010 could pressure the price to test the bullish channel's support line around $1,975 before any new attempts to rise.


    * EUR/USD Price Analysis – April 07, 2023

    * S&P500 (SPX) Price Analysis – April 07, 2023

    * GOLD Price Analysis – April 06, 2023



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