Technical and fundamental analysis for Gold – March 2022
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The tensions on a global scale are still very high and 2-weeks after the Russian invasion of Ukraine and countless sanctions against Russia, the war is starting to show major impact on all sectors of the financial market.
Goldman Sachs sees gold price @2500 USD/oz by the end of 2022
“The last time that we saw all major demand drivers accelerate simultaneously was in 2010-2011 when gold rallied by almost 70 per cent. Given the material upward revision in investment and demand assumptions, we now upgrade our 3 /6 / 12-month gold targets from $1950/2050/2150 an ounce to $2300/2500/2500 per ounce,” wrote Mikhail Sprogis, Sabine Schels and Jeffrey Currie of Goldman Sachs in a recent note.
Gold price highest since August 2022
In terms of SEK
In terms of the Swedish Krona, the gold price has gained a lot in value in a short period of time. In the second week of March 2022, the gold price reached a new historical high. Gold's price has spiked roughly 20% since the beginning of February.
In terms of USD
In terms of US dollars, the gold price almost touched the historical all-time high @2075 USD/oz, but did not break through it.
In terms of EUR
Because of the war in Europe, its currency euro has weakened a lot and for that reason, gold made a historical all-time high @1900 EUR/oz on March 8th.
Technical indicator analysis
Trendlines / Support & Resistance
• In Technical and Fundamental analysis in February, we talked about the triangle wedge and a potential breakout from there.
• On February 11th, gold bulls broke through an important triangle wedge and the price closed strongly above the downtrend line (upper line of the triangle).
• From that point forward gold price has strongly spiked up.
• There was a strong resistance area around 1912 USD/oz, but because of the increasing uncertainty in the World, gold bulls did not have much trouble breaking through that resistance area.
• Since then gold price has shot up almost 90 degrees vertically – a major price increase in a short period of time.
Fibonacci retracements (addition to Trendlined & Support/Resitance)
• Since gold price is trading near an all-time high, we must use the Fibonacci retracement tool, in order to determine a new potential all-time high.
• According to the Fibonacci tool, the next important 61.8% retracement line is @2469 USD/oz.
• This is a great time to remind you what we wrote at the beginning of the article - Goldman Sachs sees gold price @2500 USD/oz by the end of 2022.
Moving Averages
• We can clearly see that roughly a year, gold was consolidating.
• Gold was consolidating up and down between the rectangle is marked in picture 3.
• Also trading very near to the 250MA line, bouncing up and down.
• Since the first week of February gold has had a clear direction – straight up!
• 250MA with price action (two bullish pin bar candles in a row just above 250MA line) – very strong bullish indicator.
RSI
• RSI indicator is currently in an oversold area.
• We have a strong uptrend and RSI indicator corrections are steep, it is a great time to wait for RSI divergence to appear.
• The RSI divergence in correlation with trendlines & support/resistance areas are historically very potent areas to enter.
The tensions on a global scale are still very high and 2-weeks after the Russian invasion of Ukraine and countless sanctions against Russia, the war is starting to show major impact on all sectors of the financial market.
Goldman Sachs sees gold price @2500 USD/oz by the end of 2022
“The last time that we saw all major demand drivers accelerate simultaneously was in 2010-2011 when gold rallied by almost 70 per cent. Given the material upward revision in investment and demand assumptions, we now upgrade our 3 /6 / 12-month gold targets from $1950/2050/2150 an ounce to $2300/2500/2500 per ounce,” wrote Mikhail Sprogis, Sabine Schels and Jeffrey Currie of Goldman Sachs in a recent note.
Gold price highest since August 2022
In terms of SEK
In terms of the Swedish Krona, the gold price has gained a lot in value in a short period of time. In the second week of March 2022, the gold price reached a new historical high. Gold's price has spiked roughly 20% since the beginning of February.
In terms of USD
In terms of US dollars, the gold price almost touched the historical all-time high @2075 USD/oz, but did not break through it.
In terms of EUR
Because of the war in Europe, its currency euro has weakened a lot and for that reason, gold made a historical all-time high @1900 EUR/oz on March 8th.
Technical indicator analysis
Trendlines / Support & Resistance
• In Technical and Fundamental analysis in February, we talked about the triangle wedge and a potential breakout from there.
• On February 11th, gold bulls broke through an important triangle wedge and the price closed strongly above the downtrend line (upper line of the triangle).
• From that point forward gold price has strongly spiked up.
• There was a strong resistance area around 1912 USD/oz, but because of the increasing uncertainty in the World, gold bulls did not have much trouble breaking through that resistance area.
• Since then gold price has shot up almost 90 degrees vertically – a major price increase in a short period of time.
Fibonacci retracements (addition to Trendlined & Support/Resitance)
• Since gold price is trading near an all-time high, we must use the Fibonacci retracement tool, in order to determine a new potential all-time high.
• According to the Fibonacci tool, the next important 61.8% retracement line is @2469 USD/oz.
• This is a great time to remind you what we wrote at the beginning of the article - Goldman Sachs sees gold price @2500 USD/oz by the end of 2022.
Moving Averages
• We can clearly see that roughly a year, gold was consolidating.
• Gold was consolidating up and down between the rectangle is marked in picture 3.
• Also trading very near to the 250MA line, bouncing up and down.
• Since the first week of February gold has had a clear direction – straight up!
• 250MA with price action (two bullish pin bar candles in a row just above 250MA line) – very strong bullish indicator.
RSI
• RSI indicator is currently in an oversold area.
• We have a strong uptrend and RSI indicator corrections are steep, it is a great time to wait for RSI divergence to appear.
• The RSI divergence in correlation with trendlines & support/resistance areas are historically very potent areas to enter.