Early in the third week of April, Gold is consolidating not far from $1737 per troy ounce. It’s not bad especially given the March prices and investor’s attitude towards the precious metal.
From the fundamental point of view, the current market conditions are rather neutral for Gold. The physical demand is low: major economies are in no hurry to completely remove lockdowns and quarantine restrictions although they allow their citizens to have freedom of movement, which, in its turn, has a positive effect on consumer demand. In the future, when social restrictions are finally removed, consumer interest in goods made of Gold will improve. As for the influence of the USD rate, which is oppositely correlating to the Gold price, everything is quite calm right now. EUR/USD is trading at 1.1890 and looking rather inactive in anticipation of new catalysts.
In the long-term, Gold is supported by the demand from the car manufacturing industry but it will increase when the industry gets back to its normal pre-COVID-19 times – not earlier than the second half of 2021.
As we can see in the H4 chart, XAU/USD is growing with the target at 1840.00 Today, the metal may grow to break 1758.00 and then continue moving upwards to reach 1785.30. After that, the instrument may return to 1758.00 to test it from above and then resume its growth towards the above-mentioned target. From the technical point of view, this scenario is confirmed by MACD Oscillator: its signal line is moving above 0 outside the histogram area, thus implying a correction towards 1731.20. After the line re-enters the histogram area, the price chart will boost its growth.
In the H1 chart, XAU/USD is consolidating above 1731.20. If the price breaks this range to the downside, the market may correct to reach 1720.00; if to the upside – resume trading upwards with the target at 1785.30. From the technical point of view, this scenario is confirmed by the Stochastic Oscillator: its signal is moving to break 50 to the upside and then continue growing towards 80.