XAUUSD, H1
• World Gold Council reports 80% year-on-year rise in first-quarter investment demand (MarketWatch)
• Yamana Gold (NYSE: AUY) declares $0.015625/share quarterly dividend, a 25% increase from the prior dividend of $0.0125. (Seeking alpha)
• The Federal Reserve is committed to using its full range of tools to support the US economy in this challenging time, thereby promoting its maximum employment and price stability goals. (FED Statement)
• To support the flow of credit to households and businesses, the Federal Reserve will continue to purchase Treasury securities and agency residential and commercial mortgage-backed securities in the amounts needed to support smooth market functioning, thereby fostering effective transmission of monetary policy to broader financial conditions. (FED Statement)
Step by step governments and central banks need to think about their plan for after the pandemic is over, or is at least under control enough for economies to begin restarting. Reviewing the policies and monetary policies relating to gold, there is one simple and important signal to focus on; the replacing of cash flow into the market. One of the best ways the FED has been accomplishing this is by purchasing physical Gold to support the Bonds and other kinds of assets which have been sold in the past months. As we saw in the FED statement, the doors are open to purchasing more. Alternatively, we need either strong economic growth, which is not likely in the short term, as the main chains are broken and it will take time to replace and repair them, , or, more simply, to replace them with assets such as Gold, even if the “Gold Standard” lost its reputation years ago. On the other hand, trust needs time and it is going to be hard to bring the investors back into the market quickly, so safe havens are still needed. Therefore, for the long term, Gold could still stay bid, as demand is growing.
Gold Technical Analysis
Technical indicators mostly support the side movement, with bullish interest. RSI is flat at 56, OBV trend line is flat too, while Parabolic SAR dots are under the Candles and supporting the bulls. The yellow metal is in a bullish trend, and has $1719 and $1736 to break to confirm its way towards $1800. On the flip side, $1693 and $1684 are the next support levels.
- Pivot point: 1709.07
- Resistance levels: 1724.41 / 1732.95
- Support levels: 1700.55 / 1685.20
Today, the expected trading range is between 1685.20 support and 1732.95 resistance.
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Ahura Chalki
Market Analyst
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