Recently, the spot gold price once fell below the psychological barrier of $3,000, triggering technical concerns in the market about whether the gold bull market has reached its peak. On Monday (April 7) in the North American session, spot gold is currently trying to recover to around $3,030, but the technical indicators have shown obvious divergence.
Fundamental analysis
The market's concerns about US inflation continue to ferment, and the intensification of global trade frictions is driving the market's concerns about economic stagflation. The Fed's policy stance has also undergone subtle changes. The market has begun to price in five possible interest rate cuts this year. The CME FedWatch tool shows that the probability of the Fed's interest rate cut in May has soared from 33.3% last Friday to 49.3%.
At present, traders are turning their attention to the US inflation data to be released this week, which will provide important clues for assessing the US economic situation.
Technical analysts' interpretation:
Bollinger band breakthrough signal indicates a short-term correction
On the daily chart, gold prices have formed a clear upward channel since mid-March, but recently touched the upper track of the Bollinger band and began to fall. It is worth noting that the middle track of the Bollinger Band 3006.13 has become a key support level. After breaking through the historical high of 3167.60, the price has shown a typical upward exhaustion pattern. The MACD indicator shows DIFF: 43.46, DEA: 48.65, MACD: -10.39, and the green kinetic energy column has begun to expand, indicating that the short-term downward momentum is accumulating.
RSI indicator shows overbought correction
The 120-minute chart shows that the RSI indicator has fallen from the overbought area to a neutral level of 40.37. At the same time, the CCI indicator has dropped to -45.05, further confirming the trend of short-term overbought correction.
Key support and resistance level analysis
The current gold price faces multiple technical resistances, among which 3055.00 and 3085.00 constitute the main resistance range for short-term rebound. The lower support levels are mainly concentrated at $3005.00 and $2971.31, and these two levels will determine whether the gold price can remain above the psychological level of $3,000. In particular, the $2971.31 level, as a recent low, may trigger a deeper adjustment if it is lost.
From the long-term daily chart, gold prices formed an accelerated upward channel after breaking through $2950.00. The recent high of $3167.60 is just at the upper track of the channel. This trend of peaking and falling is in line with the classic channel trading theory.
Outlook
Bull Outlook: If the US inflation data exceeds expectations, the market's expectations for a more aggressive rate cut by the Federal Reserve will be further strengthened, and gold prices are expected to re-challenge the high of $3167.60 after a correction. Technically, gold prices need to return to above $3055.00 to reactivate upward momentum. The widening of the Bollinger Band width indicates that volatility is increasing, which provides potential trading opportunities for bulls.
Bear Outlook: In the short term, the downward divergence of the upper track of the Bollinger Band indicates that gold prices may face further corrections. The MACD histogram turned green and continued to expand, suggesting that downward momentum is accumulating. If the gold price falls below the key support of $2,971.31, it may trigger a deeper adjustment, and the next target will be $2,950.00 or even $2,920.00.
Fundamental analysis
The market's concerns about US inflation continue to ferment, and the intensification of global trade frictions is driving the market's concerns about economic stagflation. The Fed's policy stance has also undergone subtle changes. The market has begun to price in five possible interest rate cuts this year. The CME FedWatch tool shows that the probability of the Fed's interest rate cut in May has soared from 33.3% last Friday to 49.3%.
At present, traders are turning their attention to the US inflation data to be released this week, which will provide important clues for assessing the US economic situation.
Technical analysts' interpretation:
Bollinger band breakthrough signal indicates a short-term correction
On the daily chart, gold prices have formed a clear upward channel since mid-March, but recently touched the upper track of the Bollinger band and began to fall. It is worth noting that the middle track of the Bollinger Band 3006.13 has become a key support level. After breaking through the historical high of 3167.60, the price has shown a typical upward exhaustion pattern. The MACD indicator shows DIFF: 43.46, DEA: 48.65, MACD: -10.39, and the green kinetic energy column has begun to expand, indicating that the short-term downward momentum is accumulating.
RSI indicator shows overbought correction
The 120-minute chart shows that the RSI indicator has fallen from the overbought area to a neutral level of 40.37. At the same time, the CCI indicator has dropped to -45.05, further confirming the trend of short-term overbought correction.
Key support and resistance level analysis
The current gold price faces multiple technical resistances, among which 3055.00 and 3085.00 constitute the main resistance range for short-term rebound. The lower support levels are mainly concentrated at $3005.00 and $2971.31, and these two levels will determine whether the gold price can remain above the psychological level of $3,000. In particular, the $2971.31 level, as a recent low, may trigger a deeper adjustment if it is lost.
From the long-term daily chart, gold prices formed an accelerated upward channel after breaking through $2950.00. The recent high of $3167.60 is just at the upper track of the channel. This trend of peaking and falling is in line with the classic channel trading theory.
Outlook
Bull Outlook: If the US inflation data exceeds expectations, the market's expectations for a more aggressive rate cut by the Federal Reserve will be further strengthened, and gold prices are expected to re-challenge the high of $3167.60 after a correction. Technically, gold prices need to return to above $3055.00 to reactivate upward momentum. The widening of the Bollinger Band width indicates that volatility is increasing, which provides potential trading opportunities for bulls.
Bear Outlook: In the short term, the downward divergence of the upper track of the Bollinger Band indicates that gold prices may face further corrections. The MACD histogram turned green and continued to expand, suggesting that downward momentum is accumulating. If the gold price falls below the key support of $2,971.31, it may trigger a deeper adjustment, and the next target will be $2,950.00 or even $2,920.00.
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Disclaimer
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Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.