Analytics

Gold stays rangebound these days, struggling for direction amid muted signals from stock markets. Wall Street equities finished mixed on Monday to leave Asian counterparts directionless today, with investors looking indecisive ahead of fresh US earnings reports and an update on economic growth.

Earlier this month, the precious metal registered more than one-year highs seen just below the $2,050 figure. The bullish momentum has waned somehow since then, but the bullion continued to hold around the upper end of the extended trading range.

After a modest bounce at the start of the week, the XAUUSD turned directionless, flirting with the 20-DMA on Tuesday. During the latest retreat, gold prices also fell to the $1,970 region before bouncing to the levels just below the $2,000 psychological level that remains in focus at this stage. On the downside, the key support arrives in the $1,950 zone that capped losses earlier this month.

Bullion relies on weaker dollar

On the weekly timeframes, XAUUSD is regaining some strength in the upside momentum while still staying well above the 20- and 100-SMAs that have been capping losses since February. The RSI in the same timeframes looks directionless after retreat from the 70.00 critical level. Should the metal regain the $2,000 barrier in the days to come, the prices may retarget the $2,050 zone that capped the buying pressure in mid-April.

The metal could continue to receive a boost from a weaker dollar should the next set of US economic data and the Fed meeting disappoint USD bulls. Of note, Dallas Fed's report showed yesterday that manufacturing activity contracted this month, pressuring the greenback across the market. Now, the USD index enjoys a bounce, but the recovery potential looks limited, suggesting gold prices may regain the upside momentum after a pause.

After peaking just below the $31,000 handle last week, the price of bitcoin has been trending mostly lower these days. The largest cryptocurrency by market capitalization plunged during the previous session to settle below $29,000. The coin fell along with stocks as investors expressed concerns about further rate hikes by the Federal Reserve, suggesting digital assets continued to be sensitive to macroeconomic forces.

The digital currency was also hit by an unusually large sell order on crypto exchange Binance and an unexpectedly high UK March inflation figure that added to a cautious tone in the market and weighed over risk assets in general. UK inflation remained above 10% to arrive at 10.1% last month compared with a year ago, down only slightly from 10.4% in February. As a reminder, the Bank of England last month hiked interest rates by 25 basis points to 4.25%. Now, investors are pricing a 70% probability of a further quarter-point hike at the meeting next month.

Consolidation may lie ahead

Bitcoin looks steady after the recent sell-off, oscillating around the $29,000 mark, with bullish bias reemerging cautiously. However, the price is yet to get back above the $30,000 psychological handle in order to attract more robust demand eventually. So far, another rally looks unlikely, and the coin could spend some time in consolidation phase before deciding on further direction.

In a wider picture, liquidity in crypto markets remains thin, which implies that volatility can be expected both towards the upside and downside, depending on the overall sentiment both in the industry and traditional financial markets. The question now is when the Fed is going to stop raising interest rates, as more dovish path by the central bank would be positive for crypto assets. For now, the bank is widely expected to hike by another quarter point in May before pausing.

After a three-day recovery, the USD index came across local resistance around 102.25 to turn negative on Tuesday as risk sentiment has improved somehow across the financial markets. In part, this was due to upbeat economic data out of China. The country’s first-quarter gross domestic product rose 4.5% versus 4% expected, following a 2.9% growth in the fourth quarter of 2022.

As a result, the DXY fell back below 102.00 to threaten the 101.70 zone in early European deals. Still, the bearish potential looks limited at this stage as investors stay cautious as the first-quarter earnings-reporting season picks up steam this week.

The USD index could see more losses in the immediate term, with the next support arriving around 101.50, followed by the 101.00 region. In a wider picture, the greenback may stay afloat in anticipation of the next Federal Reserve meeting as the central bank is widely expected to raise rate by another quarter percentage point.

On the upside, the buck needs to regain the 102.00 mark in order to resume the ascent after the recent dip. However, it looks like the US currency may need a significant impetus to challenge the 102.50 barrier at this stage.

Euro bounces as mood improves

EURUSD thus managed to erase most of yesterday’s losses and climbed back to the 1.0980 zone, targeting the 1.1000 level. In the near term, the euro is likely to preserve the upside bias but the recovery looks fragile as well as risk demand. Should the pair resume the decline, the nearest support could be expected at 1.0930, followed by 1.0900.

On the data front, the German ZEW survey showed that the Economic Sentiment Index unexpectedly worsened in April to 4.1 from 13.0 in the previous month. In the Eurozone, a similar index worsened to 6.4 from 10.0, compared to the estimates of 19.8.

The price of oil continues to cling to the upper end of the extended trading range these days, holding around late-January highs on Thursday. Brent crude has been rising for the third day in a row as traders bet on Fed’s more dovish stance, citing the latest developments. In particular, fresh US data showed that consumer prices barely rose in March. The annual 5% headline rise for inflation was the smallest since May 2021.

Furthermore, according to the minutes from the March meeting of the FOMC, the fallout from the US banking crisis is likely to tilt the economy into recession later this year. Both the data and the minutes triggered a massive sell-off in the dollar, adding to a more upbeat tone surrounding oil prices.

As such, Brent crude climbed above the $87 handle for the first time in 2.5 months, with the immediate barrier arriving at $87.50. A decisive break above this resistance would pave the way to fresh multi-month highs beyond the $88 mark.

Fresh catalyst needed

However, the rally looks fragile at this stage, with downside risks persisting as demand fears reemerge, especially as the long-awaited demand surge from China has failed to gain any notable traction. Also, if demand was high OPEC+ wouldn’t have seen the need to cut production.

Elsewhere, the Energy Information Administration said US crude inventories rose unexpectedly last week. Crude inventories rose by 597,000 barrels in the last week, compared with expectations for a 600,000-barrel drop.

Oil prices shrugged off the release as the market derived support from the falling greenback. Now, Brent may need some extra catalyst to extend the ascent. Otherwise, the pressure may reemerge if risk sentiment deteriorates in the financial markets. On the downside, the immediate support now arrives around the $87 figure, followed by the $86.50 zone.

The price of gold has been holding mostly above the $2,000 psychological level these days, clinging to the upper end of the extended trading range after last week’s rally to more than one-year highs around $2,032. After rejection from fresh peaks, the metal extended the downside correction to the $1,981 zone on Monday before attracting renewed demand. As a result, the bullion regained the $2,000 mark, holding steady today.

The renewed bullish bias is due to a slide in the greenback, with the USD index retreating after a short-lived rally seen at the start of the week. As such, the dollar came under some pressure while still holding above the 102.00 during the European trading hours. The USD is unlikely to resume the ascent in the immediate term as traders are getting cautious ahead of this week’s events, including the US CPI report due on Wednesday.

Volatility to persist

Traders will also focus on PPI and retail sales data out of the United States, suggesting volatility both in the financial and currency markets would stay elevated during the week. Upbeat economic figures could lift the dollar across the board amid more hawkish Fed rate hike expectations. In this scenario, XAUUSD may have to retreat below the $2,000 figure and even challenge the ascending 20-DMA for the first time in a month.

For the time being, the bullion stays well above the 20- and 100-DMAs. On the weekly timeframes, XAUUSD is witnessing strength in the upside momentum while still staying well above the 20- and 100-SMAs that have been capping losses since February. Of note, the weekly RSI is about to enter the overbought territory, suggesting the bullishness could wane in the near term. Should the metal retest the $2,030 barrier in the days to come, the prices could retarget all-time highs seen above $2,070 in 2020.

The price of bitcoin continues to oscillate around the $28,000 figure, holding relatively steady since the second half of March. The BTCUSD pair climbed marginally during the previous session, but failed to attract more robust demand around $28,750 and retreated marginally. The largest cryptocurrency by market capitalization now needs to regain the $28,300 zone in order to retarget yesterday’s highs and get back above $29,000 eventually. On the downside, the immediate support arrives around $27,800, followed by the $27,600 region.

The coin barely reacted to a decline in traditional financial markets witnessed amid weak economic data out of the United States. According to ADP, private sector hiring decelerated to 145,000 in March, down from 261,000 in February and below expectations of 210,000. Meanwhile, the ISM non-manufacturing PMI data came in at 51.2 vs expectations of 54.5 and a prior print of 55.1 in February. Dismal figures fueled recession concerns, pushing stocks lower across the globe. Also, markets are now affected by rising political tension between Beijing and Washington after a meeting between the US House speaker and Taiwan’s president.

Where to buy BTC

Despite the nervous trading in equity markets, BTC continues to trade steady, clinging to the upper end of the recent trading range. As a reminder, the digital currency peaked at $29,170 in late March before retreating partially. Since then, bitcoin has been treading water around the $28,000 figure, struggling for further direction as investors look indecisive at this stage.

Should the coin regain the $28,300-$28,500 zone in the days to come, a breakout could be expected, with the $29,000 mark in focus. On the other hand, market players could push the prices lower before buying pressure reemerges at more attractive levels. In this context, the $26,500 region could be interesting for potential buyers.

Oil prices rallied at the start of the week and have been elevated since then. Brent crude jumped to the $86.50 zone for the first time in a month before steadying around the $85 figure. It looks like the futures struggle for direction at this stage, lacking demand to extend the ascent while also refraining from a downside correction.

The recent jump in oil prices was due to reports that OPEC+ producers unexpectedly announced that they would cut output. Saudi Arabia said it would start a voluntary reduction in its production of crude oil, alongside other members of the alliance. Saudi Arabia will cut oil production by another half a million barrels a day, while Iraq will slash production by 211,000 barrels per day, and the United Arab Emirates will decrease output by 144,000 barrels per day. The cuts will start in May and last through the end of the year. The decision fueled supply-related concerns, thus pushing prices north.

Fresh impetus needed

In other industry news, the US data revealed that crude stockpiles decreased by more than anticipated. The API announced a decrease of 4.3 million barrels in US crude oil inventories versus the expected draw of 1.8 million barrel.

It looks like oil prices need some fresh impetus to extend the ascent at this stage, with traders looking indecisive after a rally seen on Monday. Risk sentiment remains mixed across the financial markets as investors remained worried about the state of global banks and the economy.

Technically, Brent crude needs to challenge the mentioned highs around $86.50 in order to target the $90 psychological level. The immediate barrier would arrive around $86.70, followed by the $87 mark that capped the rally in mid-February. On the downside, the nearest support lies around $84, followed by the $81.50-$81.40 region.

The US dollar is back under pressure after a short-lived bounce seen on Wednesday. The USD index has been sliding for the third week in a row, holding below 102.50 on Thursday after a failure to hold above the 103.00 handle at the start of the week.

In part, the pressure is due to some improvement in risk sentiment. After a solid rally on Wall Street, Asian stocks were mixed today, with worries over banks following the collapses of several lenders eased further due to actions by regulators. In Europe, equities continued positive momentum from the previous session, with almost all sectors in the green. Still, financial markets continue to trade in a choppy manner ahead of fourth-quarter GDP reading from the US.

Also, the dollar has been on the defensive amid rising possibility that the Federal Reserve may have to pause rate hikes despite the need to continue its fight against inflation. In this context, an absence of hawkish comments from the Fed officials could continue to weigh on the buck in the coming days and weeks.

Euro on the offensive

Against this backdrop, EURUSD keeps advancing above the 1.0800 zone, approaching the 1.0900 handle on Thursday. The shared currency continues to erase recent losses, albeit the recovery momentum looks fragile at this stage. As a reminder, last week, the pair briefly rallied to early-February highs around 1.0930 before losing the bullish momentum. On the weekly charts, the technical picture looks upbeat as the RSI keeps pointing north in neutral territory, suggesting the bullish bias could dominate at this stage.

If the shared currency fails to hold above the 20-weekly SMA, today at 1.0660, the pair may see some losses in the near term. On the downside, the immediate support is now represented by the 1.0820 region, followed by the 1.0800 psychological level.

The price of gold has been losing ground for the third session in a row on Tuesday as traders refrain from making fresh bullish bets at this stage. Gold has settled in the $1,950 area, trading slightly negative on the day even as the US dollar stays under pressure across the board.

The greenback is back on the defensive after a short-lived bounce from fresh early-February lows registered below 102.00 last week. The USD index has been sliding for the third session in a row, holding around 102.60 on Tuesday after a failure to stay above the 103.00 handle at the start of the week.

The prices could yet retest $2,000 in the near term if buying pressure reemerges. On the positive side, the bullion stays well above the 20- and 100-DMAs, also holding close to the upper end of the extended trading range. On the weekly timeframes, XAUUSD is witnessing a fade in the upside momentum while still staying well above the 20- and 100-SMAs that have been capping losses since last month. Should the metal overcome the $2,000 barrier in the near term, the prices could retarget all-time highs seen above $2,070 in 2020.

$2,000 remains in focus

As a reminder, last week, the price of gold rallied to one-year highs around $2,009 before attracting some profit-taking and thus failing to confirm a break above the $2,000 psychological level. As such, the bullion retreated amid some overbought conditions both in the daily and shorter-term timeframes.

As concerns over a banking crisis have eased, risk aversion abated, thus weakening demand for the safe-haven yellow metal. However, worries could reemerge at any point, with investors staying nervous at this stage.

In the immediate term, XAUUSD could needs to hold above $1,945 in order to refrain from deeper losses towards the ascending 20-DMA, today at $1,905. On the upside, the nearest target arrives around $1,970, followed by the $1,985 intermediate barrier on the way to the mentioned $2,000 psychological level.

The price of bitcoin briefly rallied to fresh mid-2022 highs around $28,800 before plunging by 3% on Wednesday. The selling pressure reemerged after the Fed meeting outcome. As expected, the central bank raised rated by just 0.25%, while at the same time acknowledging issues in the banking sector, thus spooling market participants. Adding to the pressure in the stock market, were comments from Treasury Secretary Janet Yellen, who noted that the US was not currently working on a so-called blanket insurance for bank deposits.

Against this backdrop, Wall Street stocks dipped along with other risky assets, including bitcoin. Of note, the also dollar fell along with expectations of more rate hikes by the Fed amid the emerging banking crisis.

Since then, the BTCUSD regained some ground but still stays below the $28,000 figure as volatility has ebbed somehow. Despite the recent correction, the overall uptrend remains intact, suggesting the coin could see fresh multi-month highs in the near term, especially as dollar’s appeal keeps waning amid rising concerns over US banks. The immediate upside barrier now arrives at $28,000, followed by the $28,400 hurdle on the way to the mentioned highs.

Outlook keeps improving

In a wider picture, the outlook for the largest cryptocurrency by market capitalization keeps improving, with prices holding above the $24,000 figure since mid-March, having rallied nearly 70% so far this year. The latest break above $28,000, albeit brief, confirms investors’ interest in buying BTC further.

In the coming days, a close above the $28,000 hurdle might trigger another major increase. In this scenario, the price could retest the $28,500 level. Any more gains might send the price towards the $28,800 zone that capped the latest rally.

Citing bitcoin’s performance in the face of banking turmoil triggered by the collapse of Silicon Valley Bank, some market observers expect the digital currency to challenge all-time highs around $69,000 later this year and could even hit the $100,000 figure.