This latest drop in the gold price reflects the market’s relief that the Swiss National Bank is pressuring UBS to buy Credit Suisse to ease fears of its outright demise.
- During last week’s trading, the bulls continued to control the performance of the gold (XAU/USD) price, with gains that reached the resistance level of 1988 dollars an ounce.
- It closed the week’s trading stable around the level of 1969 dollars an ounce, as the US dollar recovered in a limited way in the last session of last week’s trading.
- The upward trajectory of the gold price still exists, and this performance will be on an important date this week. US job numbers will be announced, which will have a strong reaction to expectations of raising US interest rates in the coming months.
On the economic side, gold is trading affected by the results of recent economic data, as it was announced that PCE prices in the United States of America for the month of February exceeded the expected change (monthly) by 0.2% with a change of 0.3%. The equivalent (yoy) missed the expected change of 5.3% with a change of 5%. On the other hand, the core PCE price index for the period fell below the (MoM) and (YoY) forecasts of 0.4% and 4.7% respectively with a change of 0.3% and 4.6%.
Elsewhere, personal income exceeded the estimated change of 0.2% with a change of 0.3% recorded, while personal spending lost 0.3% with a change of 0.2%. Before that, it was announced that initial jobless claims for the week ending March 24 exceeded the expected number of claims of 196 thousand, with a count of 198 thousand, while the annualized GDP for the fourth quarter fell from 2.7%, with a change of 2.6% recorded. The GDP price index matched the estimated change of 3.9%.
In general, global economic uncertainty caused many challenges for financial institutions and investors alike during the past quarter. While the pandemic was thought to be one of the biggest disasters for the financial world in decades, recent high inflation and other challenges have resulted in continued uncertainty in the global economy, despite strong resilience in some markets.
And in these tough times, many investors have turned to gold as an alternative to stocks and bonds, as the precious metal is known to be relatively resistant to inflation. But as is common in current market conditions, prices are volatile. The recent major developments in the global financial markets have led to a decline in the price of gold from its recent high. The price of gold has fallen around £60 an ounce in the UK from an all-time high of £1,648.64. It also trades for less than $2,000/oz in the US at $63.9 a gram. In Europe, the price fell to 58.24 euros per gram, with investors around the world affected by this matter, as many keep some gold reserves, and most financial institutions depend on it.
This latest drop in the gold price reflects the market’s relief that the Swiss National Bank is pressuring UBS to buy Credit Suisse to ease fears of its outright demise. Those concerns were raised in the wake of the earlier collapse of a Silicon Valley bank, which collapsed earlier this month.
While these bank meltdowns may sound terrifying, they do not signal the end of the financial world as we know it: at least not yet.
Savvy investors realized that the Swiss bank was bought for about £2 billion, which is £5 billion less than its assumed market capitalization a few days ago. This drop in rates reflects the toxic nature of the bank and its practices and shows that the bank’s balance sheet was worse than previously thought. Common causes of the collapse of the technology-focused financial institution include poor governance and issues arising from the fiscal policies of the Donald Trump era in the United States.
In the near term, and according to the performance on the hourly chart, it appears that the XAU/USD price is trading within a bullish channel formation. This indicates a significant short-term bullish bias in market sentiment. Therefore, the bulls will be looking to ride the current high towards $1982 or higher to $1995 an ounce. On the other hand, the bears will look to pounce on pullbacks around $1957 or lower at $1944 an ounce.
In the long term, and according to the performance on the daily chart, it appears that the yellow metal is trading within a consolidating triangle formation. This indicates that there is no clear directional bias in market sentiment. Therefore, the bears will target potential bearish breakouts around $1.925 or lower at $1881 an ounce. On the other hand, the bulls – the bulls – will target long-term profits at around $2009 or higher at $2060 an ounce.
Ready to trade today’s Gold forecast? Here are the best Gold brokers to choose from.