Gold sell

Correction in gold after testing $2,000 per ounce

24 March 2023 188
Correction in gold after testing $2,000 per ounce

Gold is changing little on Friday. Recently, there was a $2,000 level test followed by a pullback. A positive reaction after the Fed meeting was won back, and now the correction might continue. The U.S. dollar index that reached the support area on the daily timeframe also hints at this and attempts to reverse. A rise in the dollar index will signal a flat or downward movement in gold.

Correction in gold after testing $2,000 per ounce - Photo 1

U.S. Dollar Index

Rabobank economists have revised their 2023 rate forecast downward. Earlier, they expected two hikes to the range of 5.25-5.50%, but now assume a maximum of one to 5-5.25%. There is also a possibility of rates left unchanged. However, Rabobank economists underline the fact that the FOMC is unlikely to change its position and ease monetary policy this year.

After the Fed meeting, not all market participants await rate cuts this year. The increased number of monetary hawks might put pressure on gold.

Gold will trade from $2,000 per ounce during 2023. As Milling-Stanley assumed, the dollar’s strengthening restrained a rise in the precious metal prices last year, but now an increase by a few more basis points will not have a similar impact. The growing banking crisis will be a new factor that should continue to support the yellow metal prices at its current levels.

In the medium term, we agree with the analyst that the worsening banking crisis will lead to gold's rise. However, fears of the banking problems now temporarily retreated, which might stimulate the correction in the precious metal.

According to the technical analysis, gold retreated from a round level of $2,000. The decline might continue amid the dollar’s reversal. The RSI indicator on the hourly timeframe shows that there is room to decrease. The downside target might be the level of pro-trading around $1,970, where the drawdown purchase took place. Stop-loss will be set at gold’s rise above yesterday’s highs, which is equivalent to $2,004.

Gold prices are likely to decline:

Take profit – 1,970

Stop-loss – 2,004

This content is for informational purposes only and is not intended to be investing advice.

New Popular
Commenting rules