Where Did You Gold? – Gold Bulls Take Price Back Above $1,800

The gold bulls have been fighting back hard and it’s paying off as the price has moved beyond $1,800. At the time of writing, XAU/USD stands at $1,811.20 and is trading above its 10-day and 50-day Simple Moving Average (SMA). At the present moment, the Moving Average Convergence Divergence reflects a bullish trend.

However, there appears to be a certain level of cautiousness prevailing in the market as the Relative Strength Index (RSI) has been lingering at mid-level for some time, and currently stands at 56. 

Source: Yahoo Finance

For the bulls to maintain their upward momentum, analyst Anil Panchal believes that a key resistance lies at $1,818-19, where the 21-day Exponential Moving Average (EMA) merges with a sloping trend line from Jan 6. Meanwhile, for the bears to make a comeback, a key support level rests at $1,785. 

With the bulls and the bears continue to battle for power, let’s take a look at the broader market to identity potential catalysts. An upcoming event for traders would be the speech from U.S. Federal Reserve (Fed) Chairman, Jerome Powell to detect any upcoming changes in the Fed’s existing monetary policy. 

Meanwhile, President Biden recently held a memorial service as the United States has surpassed the 500,000 mark in terms of Covid-19 deaths. This serves as a grim reminder that the battle against the virus has not been won yet, which would then serve the cause of the gold bulls. 

In terms of the $1.9 trillion Biden Stimulus Package, Business Insider reported that the Democrats are aiming for the package to be approved within weeks. In the latest update, the U.S. House Budget Committee has approved the federal-aid plan in a party-line vote and this means that the package would then move on to a floor vote this week. 

The large stimulus package is expected to drive U.S. economic recovery, which could then lure traders away from the safe-haven goal. 

Recently, analysts from Citi Bank had reduced their 6-12 months gold point-price target from $2,100/oz. to $1,950/oz., on the basis that the recent hype over cryptocurrencies could lead to funds outflow from gold.  

At this moment, it appears that the gold bulls have plenty on their plate if they wish to reign, so let’s keep an eye on how things progress when it comes to gold. 

XAU/USD (as of Feb 23, 2021, 10.50 a.m., GMT +8) - $1,811.20

FOLLOWME XAU/USD User Sentiment (as of Feb 23, 2021 at 11.30 a.m.)

Short – 52.80%

Long – 47.20%