The price of gold (XA/USD) spiked to new multi-year highs of about $1,445 on Thursday afternoon despite better than expected US data from various economic reports.
The price of the yellow metal managed to breach the 2019 key resistance level of about $1,439 after extending gains towards the $1,445.
This created a breakout from a symmetrical triangle pattern formation that stretches back to mid last month. Following today’s gains, the price of gold has now hit overbought levels in the relative Strength Index Indicator.
XAU/USD Fundamentals Overview
The performance of gold prices relies heavily on the general economic overview. The US economy, in particular, tends to dictate price movements of the yellow metal.
The XAU/USD (gold) is trading at the back of several economic events and reports that have sent mixed signals in the financial markets. In the UK, the uncertainty surrounding Brexit continues, with hard Brexit now highly expected to be the outcome.
In the US, trade tensions with China continue and recent economic data has failed to offer any assurances about the stability of the US economic growth.
On Thursday, US initial Jobless Claims rose to 216k up from 208k but continuing jobless claims edged lower to 1.686M down from 1.728M in the previous period. The Philadelphia Fed Manufacturing Survey report beat expectations of 5.0 with 21.8.
XAU/USD (Gold) Technical Analysis (the 60-min Chart)
From a technical perspective, the price of gold appears to have recently hit overbought levels in the RSI Indicator in the 60-min chart. This could trigger a pullback imminently as the bulls begin to take profits.
As such, the bears will be targeting any pullbacks at around $1,436 for profits. Nonetheless, some bulls could look to rally the price of the yellow metal even higher towards $1,455.
XAU/USD (Gold) Technical Analysis (the Daily Chart)
In the daily chart, the price of gold appears to be trading at levels last reached back in 2013. This indicates a major bullish bias in the gold market, which could be indicative of growing concerns about global economic growth.
Therefore, long-term trading opportunities could be very appealing to the bulls but the bears will not shy from targeting major pullbacks. The bulls will be targeting $1,479 while the bears will look down below at $1,425.
In summary, the price of gold shot up on Thursday to new multi-year highs and this could trigger a major pullback. However, the bulls will look to maintain control in the meantime.