Technical Analysis

GOLD Price Analysis – March 22, 2023

By LonghornFX Technical Analysis
Mar 22, 20233 min

Daily Price Outlook

The price of gold, XAU/USD, is currently trading around 1,938.83. On Wednesday, gold prices traded within a narrow range after a sharp decline as the market awaited the Federal Reserve's interest rate decision. Additionally, the demand for gold as a safe haven decreased as concerns over a financial crisis faded.

Easing Banking Fears

Comments from US Treasury Secretary Janet Yellen helped alleviate concerns about banking instability, as she highlighted the Federal Reserve's efforts to provide liquidity to the banking sector through measures such as the Bank Term Funding facility and discount window loans.

As a result of government assistance and easing concerns about a potential banking crisis in the US and Europe, gold prices experienced significant losses. While demand for safe-haven assets played a role in the recent surge of gold, the easing of banking concerns led to a sell-off in the metal.

With concerns about a banking crisis subsiding, markets have begun to anticipate a higher likelihood that the Fed will take a firm stance against inflation, potentially leading to an increase in interest rates. However, this could decrease risk appetite and have a negative impact on XAU/USD.

Fed Interest Rate Decision Ahead

The Federal Reserve's two-day meeting has come into focus, and it may increase rates later in the day to temper hotter-than-usual inflation.

The Fed could vote in favor of an additional 25 basis point increase at its March 22 meeting, bringing US interest rates to a high of 5%. The Fed is also expected to call for more increases to help the US economy keep up with inflation, which rose at a yearly rate of 6% in February.

Over the past year, the Fed has already raised interest rates by 450 basis points and claims it will continue to rely heavily on rate hikes to bring inflation back to its long-term goal of 2% per year.

As the Fed meeting approaches, the US Dollar Index remains steady at 103.19, while the yield on US 10-Year Bonds has fallen to 3.598%.

Despite the DXY's lackluster performance, XAU/USD is struggling to hold steady. The Fed's commitment to continuing the fight against inflation is the reason behind this.

 Gold Price Chart - Source: Tradingview

Gold (XAU/USD) Intraday Technical Levels

Support      Resistance

1922             1972

1904             2004

1872             2022

Pivot Point:  1954

Gold (XAU/USD) – Technical Outlook

Yesterday, the price of gold went below $1960.00, signaling negative pressure that might lead to a bearish correction with a target of $1909.60.

Nonetheless, technical signs are indicating that a rebound is possible in the near future. The stochastic oscillator is clearly oversold, and the EMA50 is currently giving support from below.

As a result of the conflicting technical variables, it is better to stay out of the market until a clearer signal for the next trend arises. It is worth mentioning that a break of the $1933.20 support level will send the price farther lower, possibly to $1909.60 or even $1885.90. In contrast, breaking above the $1962.50 resistance level is critical to restarting the major bullish trend, with targets at $2000.00 and $2040.00.


    * EUR/USD Price Analysis – March 22, 2023

    * S&P500 (SPX) Price Analysis – March 22, 2023

    * GOLD Price Analysis – March 20, 2023



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