Gold short-term analysis – 17 March 2023
Gold's daily candlesticks are trading in their bullish channel between the upper blue and red bands. The red Bollinger bands have expanded due to an increase in volatility. The longer the precious metal remains in this channel, the greater the likelihood of further price appreciation.
Its hourly chart has charted an ascending triangle pattern (blue dashed lines), which has higher lows. The upper boundary of the pattern overlaps with the R1 pivot, which is acting as resistance. The hourly momentum-based stochastic is over 80 (green rectangle), which suggests that an underlying momentum is present. If the stochastic can maintain current levels, the momentum will be price supportive, with the R1 pivot looking vulnerable. However, if the stochastic drops below 80, the upside momentum will be considered to be waning.
Gold has benefitted from the market turmoil that has gripped the banking sector over the last week. As uncertainty dominated, capital found its way towards the precious metal as a haven. Moreover, there is some debate to what direction Fed monetary policy will take on 22 March. If it comes in more dovish than previous, it will likely provide a tailwind for XAUUSD.
Russell Shor
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.
Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.