Technical Analyst, Saxo Bank
Summary: Gold is trading higher on short-, medium- and longer- term eyeing new all-time highs with potential up to 2,350 area.
This analysis will not only look at Gold spot XAUUSD but also at three US and European listed ETF and ETC’s denominated in EUR and USD to invest in if you want an exposure to Gold
Gold XAUUSD. Correction in Gold down to the 0.382 Fibo Retracement seems to be over. Gold is now back on the rise and is likely to have another go at the 2K level. If Gold takes out last week’s peak at around 2,010 all-time high levels around 2,075 could be reached in a couple of weeks. Previous all-time high around 2,075 is within few dollars of the 1.764 Fibonacci projection at 2,078 of the Q1 correction.
RSI on daily time period is positive with no divergence supporting the bullish outlook.
For Gold to reverse the uptrend short-term a close below 1,934 would be needed. However, that would likely just cause a correction down to around 1,900-1,882 i.e., the 0618 correction and the 55 daily Moving Average.
There is divergence on weekly RSI indicating the past couple of weeks uptrend is weakening but if Gold closes above 2,010 that divergence is likely to be traded.
For Gold to reverse the medium-term uptrend a close below 1,800 is needed.
Medium-to longer-term. If Gold closes above 2,075 there is upside potential to 2,245-2,352 which are the 1,382 and the 1,618 projections of the 2022 correction. Monthly RSI is positive with no divergence supporting the longer-term bullish outlook.
Read our Commodities analysis expert Ole Hansen for a more Macro/Fundamental view on Gold "Thoughts on Gold ahead of FOMC"
SPDR Gold Trust US listed. GLD:arcx. Seeks to reflect the performance of the Gold bullion i.e., it correlates almost 100% with Gold spot XAUUSD meaning the technical picture is identical.
GLD is in an uptrend both short- and medium-term . For the medium-term uptrend to reverse a close below USD168.19 is needed. Invesco Physical Gold ETC listed on London Exch. In USD. IGLN:xlon. Correction in IGLN seems to be over and the short- and medium-term uptrend has resumed. An uptrend that could take IGLN above previous all-time highs, possibly up to the 1.618 projection at around 40.05
However, if IGLN drops back to close below USD37.75 a larger correction down to the 0.618 retracement at 36.65 could be seen. Invesco Physical Gold ETC listed on Frankfurt Exch. In EUR. 8PSG:xetr. Corrected almost 50% of the March bullish move but now seems to pick up the uptrend. An uptrend that could take the ETC 190-195.
A close below EUR173.57 could lead to further sell-off down to 0.618 retracement at 171.
RSI divergence explained: When instrument price is making a new high/low but RSI values are not making new high/low at the same time. That is a sign of imbalance in the market and an weakening of the uptrend/downtrend. Divergence or imbalance in the market can go on for quite some time but not forever. It is an indication of an exhaustion of the trend
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.