Technical Analysis

GOLD Price Analysis – February 21, 2023

By LonghornFX Technical Analysis
Feb 21, 20233 min

Daily Price Outlook

Gold (XAU/USD) is currently trading at 1,842 and has had a slightly bearish start to the trading week. The gold price is currently struggling to make significant moves and is hovering around the $1,840 level.

Federal Reserve's Monetary Policies to Shape the US Economy

The US Federal Reserve's monetary policy is a key factor affecting gold prices. There has been speculation that the central bank may soon end its quantitative easing measures, but recent inflation data has raised questions about whether inflation is actually declining. With high US inflation and a strong labor market, the Fed's actions are under close scrutiny.

Investors are now awaiting the release of the Federal Open Market Committee (FOMC) minutes on February 22 for further guidance. Market participants are closely monitoring inflation forecasts and monetary policy indicators for March.

Today, the main focus of the discussion will be the FOMC meeting minutes, which could have an impact on the trading price of XAU/USD.

Understanding US PMI: A Key Indicator for the Health of the US Economy

Traders are eagerly awaiting the first readings of the February Purchasing Managers Index (PMI) for the US. The consensus forecast is that the PMI will rise to 47.4, up from 46.9 in the previous report. Additionally, the Services PMI may be reported at 47.3, an improvement from the previous reading of 46.8.

The PMI figures are expected to have an impact on the value of the US dollar. It is possible that the dollar will continue to strengthen, which could cause a decline in the XAU/USD exchange rate.

US Dollar Index and US Treasury: Understanding the Current Trend

Cleveland Fed President Loretta Mester and St. Louis Fed President James Bullard made comments indicating their support for more rate increases at the upcoming FOMC policy meeting. This caused the US Dollar Index (DXY) to recover its day's high at 104.02 and US Treasury yields to rise. Benchmark US Treasury rates have recently climbed to their highest level in more than three months, trading above 3.82%.

Higher profits from the US Dollar have an adverse effect on dollar-denominated commodities such as gold, as international buyers have to pay more to purchase them. The gold market is also influenced by interest rate movements since they affect the opportunity cost of holding non-yielding metals.

 Gold Price Chart - Source: Tradingview

Gold (XAU/USD) Intraday Technical Levels

Support      Resistance

1837            1847

1832            1852

1827            1857

Pivot Point: 1842

Gold (XAU/USD) – Technical Outlook

Gold is currently trading within a descending channel, with resistance near $1,845 and support near $1,820. A double top pattern on the 2-hour timeframe is acting as a strong resistance near $1,845, and a breakout above this level could lead to further upside for gold. Immediate resistance levels are at $1,860 or $1,870.

Both the RSI and MACD indicators are currently showing a buying zone, suggesting a bullish bias in the market. However, the continuation of the uptrend is dependent on whether or not gold can break through the $1,845 resistance level. In case of a downward movement, gold's immediate support level is near $1,830, followed by $1,820.


    * BTC/USD Price Analysis – February 21, 2023

    * EUR/USD Analysis – February 21, 2023


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