The price of gold XAU/USD appears to have hit a crucial support zone following last week’s pullback. The yellow metal has experienced a steady rally for the most part of last month before plunging last week to shed nearly 90% of those gains. However, the price of XAU/USD (Gold) now appears to be on the way up after making a rebound.
XAU/USD (Gold) Fundamentals Overview
From a fundamental perspective, gold is often regarded as one of the best safe havens of financial investments in the event of an economic collapse. The month of March sent mixed signals to global financial markets with uncertainty in the UK and the rest of Europe perpetrated by the Brexit stalemate while the US-China trade talks were pushed to April.
On the other hand, the Federal Reserve indicated that there will be no rate hikes in 2019, and this sent the 10-Year Treasury Yield plunging. Investors saw this as an opportunity for the stock market and this rallied stocks again, which resulted in the current decline in the price of gold. The weakness in the US retail data also helped the Gold price to rally early on Monday.
XAU/USD (Gold) Technical Analysis (the 240-min Chart)
From a technical perspective, the price of the yellow metal appears to be approaching a new session high with a cap of about $1,300. In the 240-min chart above, the bulls will be targeting $1,300 for profits while the bears will look down below for opportunities around the $1,288 level, or further down at $1,285.
The $1,300 mark also appears to coincide with the current 200-period moving average, which makes it a strong resistance level.
XAU/USD (Gold) Technical Analysis (the Daily Chart)
In the daily chart, the XAU/USD gold appears to be trading just above the crucial 38.20% Fib level, which suggests that it could enjoy strong support at this level. The same level was previously a strong resistance level, which now appears to have turned into support.
As such, the bulls will look for a potential immediate rebound towards the $1,320 level for intermediate profits while the bears will hope that the 38.20% Fib level is breached for the price of gold to fall towards the $1,280 level.
In summary, the price of gold XAU/USD looks well set for a bullish run but the bears could still hold a say given the contradicting technical viewpoints.