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Gold Technical Analysis: Heading Towards Buy Levels

  • At the end of last week’s trading, gold futures XAU/USD fell to the level of $1853 per ounce, the lowest price in more than a month.
  • Gold prices failed to prevent a weekly loss.
  • The price of the yellow metal XAU/USD has made a good start to the year, supported by expectations that the US Federal Reserve Board has reached the peak of its monetary cycle and that it may cut US interest rates later this year.
  • With inflation continuing to rise, gold prices could find support at $1900 if levels reach oversold levels.

Overall, gold prices XAU/USD fell 0.25% over the past week but are still up more than 2% YTD. In the same performance, the prices of silver, the sister commodity of gold, struggled to stay above the level of $22 per ounce on Friday. The price of the white metal posted a weekly decline of about 1.6%, adding to its 2023 decline of about 9%.


The XAU/USD gold price has really struggled as the US dollar has risen. The dollar showed signs of life in recent trading sessions as investors sought to turn to the international reserve currency amid a stock market slump. Accordingly, the US dollar index (DXY), which measures the performance of the US currency against a basket of other major currencies, rose to 103.66, from opening at 103.26. The index recorded a weekly gain of 0.7% and a monthly gain of more than 0.1%.

In general, a stronger profit for the dollar is good for dollar-denominated goods because it makes their purchase more expensive for foreign investors.

Other factors affecting gold market

U.S. Treasury yields were also mostly high across the board, with the benchmark 10-year Treasury yield up 5.7 basis points to 3.74%. In addition, the two- and ten-year bond yields are the most inverted since the 1960s.

Looking ahead next month, the Federal Open Market Committee (FOMC) is widely expected to raise the US interest rate by 25 basis points.

Meanwhile, on the economic data front, the American consumer confidence index at the University of Michigan rose to 66.4 in February, while inflation expectations for next year swelled to 4.2%. And all eyes will be on the January US Consumer Price Index (CPI) report this week. It is expected to decline to 6.2%, and core inflation is expected to slow to 5.5%.

As for other metals markets, copper futures fell to $4.015 per pound. And platinum futures fell to $949.60 per ounce. And palladium futures fell to $1525.50 an ounce.

Technical analysis of gold prices XAU/USD:

In the near term and according to the performance on the hourly chart, it appears that the XAU/USD gold price has recently completed an upward breakout from the descending channel formation. This indicates a sudden change in market sentiment, from bearish to bullish. Therefore, the bulls will target short-term profits at around $1875 or higher at $1886. On the other hand, the bearish speculators will look to pounce on profits at around $1861 or lower at the $1852 support.

In the long term and according to the performance on the daily chart, it seems that the price of the yellow metal XAU/USD has recently completed a downward breakout to form an ascending channel. This indicates a sudden change in market sentiment from bullish to bearish. Therefore, the bearish speculators will look to extend the decline towards $1.822 or lower to $1772 per ounce. On the other hand, the bulls will target long-term profits at around $1909 or higher at $1957 per ounce.

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