Gold price rises after a positive start to the key week, while the dollar index (DXY) rebounds after its biggest drop in a month as traders draw attention from the Fed. Gold is flat in Asia as markets consolidate before it can turn into a choppy trading day for the rest of the week, according to market analyst Anil Panchal. The analyst reminds that the economic calendar is full of events that are expected to move the needle in the yellow metal. Anil Panchal’s market assessments and technical analysis cryptocoin.com We have prepared for our readers.
Key events and data for gold traders and traders to follow
During Asian hours, trading is expected to remain under pressure with several markets on holiday for the Lunar New Year, but the Reserve Bank of Australia could disrupt the peace and quiet. This is due to expectations that Governor Philip Lowe will surrender to his previous belief that a rate hike this year is unlikely. According to the analyst, this development could shake the dollar and then support gold prices to move higher.
Witnessing the Fed’s hawkish stance last week, various Fed policymakers expressed their dissatisfaction with the high inflation and rate hikes in March. However, the lack of clarity regarding the pace of the rate hike seems to have suppressed DXY, which was in favor of gold the previous day. Among the key Fed speakers, we should not forget Atlanta Fed President Raphael Bostic and Kansas City Fed President Esther George, and San Francisco Federal Reserve Bank President Mary Daly.
Elsewhere, the Washington Post quoted Russia’s response to the US proposal on Ukraine, citing an unidentified Senior Diplomat, and said, “The Russian government has given a written response to the US proposal aimed at reducing the Ukraine crisis.” British Prime Minister Boris Johnson is also scheduled to visit Ukraine on Tuesday, while US Secretary of State Antony Blinken and Russian Foreign Minister Sergei Lavrov will also hold talks today.
In addition to the mixed Fed updates and the easing of pressure on the Russia-Ukraine issue, a mild calendar and the market’s divergence from the Fed’s hawkish communications also helped Wall Street indicators get an optimistic start to the week. The same situation challenged the US 10-year Treasury rates, while DXY made the biggest drop in a month, supporting gold buyers. Going forward, gold traders will watch the expected January US ISM Manufacturing PMI of 57.5 versus the previous 58.7 for quick direction. However, the analyst states that more attention will be given to Fedspeak and developments regarding Russia.
Gold price technical analysis
Market analyst Anil Panchal states that gold prices continued to bounce back at the beginning of the week with the 50% Fibonacci retracement in August-November 2021. According to the analyst, given the stable RSI and bearish MACD signals, gold sellers have yet to convince the markets before they regain control. “This highlights a convergence of the 50-DMA and previous support line in August around $1,802 as the key nearby resistance,” he said, noting the following technical levels:
Following that, the confluence of the 200-DMA and Fibonacci 38.2% around $1,806 will push gold buyers further before leading them to the December 2021 high near $1,831. On the contrary, the aforementioned 50% Fibonacci retracement level near $1,782 is constraining the price’s immediate pullback.
Following that, the 78.6% Fibo near $1,773 on the four-hour (4H) chart will push gold sellers before leading them to $1,753 December lows, the analyst says. Furthermore, the analyst states that the RSI and MACD conditions are supporting gold buyers in 4H, suggesting it is an extension of the latest recovery moves.
To sum it up, the gold price has risen to consolidate losses from the Fed, but the bulls have serious problems to maintain their strength.
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