FOREXN1

GOLD: PENDING ORDER $2000 STRUCTURE | SHORT SETUP 🔔

Short
OANDA:XAUUSD   Gold Spot / U.S. Dollar
Gold Price looks north as investors seek refuge amid inflation , growth risks.
XAUUSD shrugs off firmer US dollar , yields on hawkish Fed’s outlook.
Gold bulls keep their sight on $2,000 but acceptance above $1,990 is critical.
Having booked the second straight weekly gain, gold price is setting off a new week on the right footing, as bulls regather strength after Good Friday’s brief pullback. XAUUSD is sitting at the highest level since March 14 at $1,989, as the increased demand for safety outweighs the ongoing rally in the US Treasury yields alongside the dollar. With no end in sight to the Russia-Ukraine war and a likelihood of a European Union (EU) embargo on the Russian gas, commodities prices have shot through the roof, intensifying fears over inflation and its impact on the global economy.

That said, investors also remain worried about the risks to growth, as major central banks embark upon the path of policy normalization to curb raging inflation . Markets failed to find any comfort from the stronger China’s Q1 GDP data, as investors assess the impact of the recent covid lockdowns and the PBOC’s RRR cut.

Meanwhile, the dollar and the yields keep the upside rolling, as a 50-bps May Fed rate hike seems a done deal. The Fed commentary last week hinted that the world’s most powerful central bank looks to return to neutral rates sooner (than later). The ECB’s dovish surprise widened the yield differential in the favor of the dollar and provided extra legs to the upside in the US rates.

Looking forward, the negative tone in the market sentiment will continue to keep the haven demand for Gold Price underpinned, although bulls could face an uphill battle should the dollar and yields continue firming up. The speech from the St. Louis Fed President James Bullard will stand out amid a data-scarce US docket and Easter Monday-led thin market conditions.
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