Gold is getting comfortable above $2 000

Recently, gold started to show serious signs of awakening. Just two weeks ago, it rose above $2 000, a level unseen since early March 2022. Currently, it trades near $2 027 per ounce, about 2.3% below its all-time high value. Overall, we would say that gold is performing very well against a backdrop of high inflation, monetary tightening, and worsening economic conditions in the U.S. and around the globe. However, that is no surprise to us as we previously outlined how record purchases among central banks last year paved a bullish road ahead for this precious metal. As a result, we continue to be highly bullish on gold in the long term and expect it to overtake its previous top in the coming months (if not weeks).

Illustration 1.01

Illustration 1.01 shows the daily chart of XAUUSD and two simple moving averages. At the moment, gold can be seen deviating too far from its 20-day and 50-day SMAs, which often precedes a retracement toward these levels. That raises our caution as we might see a pullback in the price of gold (before it continues higher).

Technical analysis
Daily = Bullish
Weekly = Bullish

Please feel free to express your ideas and thoughts in the comment section.

DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.

Trade active:

XAUUSD reached its 20-day SMA. However, it still remains far from its 50-day SMA, which makes a case for a further decline in the price.

Trade active:

We voice a word of caution ahead of the FOMC meeting that is scheduled for tomorrow. It may cause the gold price to be very volatile.