Gold Price Forecast: King Dollar is Back Again.
Updated
Fundamental View: Last week, the US job market printed a super positive report compared to its forecast. but the gold's drop was short-lived because of some political factors.
Specially Russian-Ukraine issues are inflaming the gold and other commodities prices. But can gold ignore the supper positive NFP report?
Yes, it is damn possible. Political crisis always dominates economic reports in the investment market. But I don't think the US and Russia will conflict with the Ukraine issues.
The world leaders are separated into two groups. Europen and the US and its allies are supporting Ukraine. On the other hand, Russia and China are playing in the same belt. So, I don't think Russia will attack Ukraine. But as long as Russia and Ukraine issues still exist and tension rises, gold will still have a positive bias.
As a result, when the NFP report came, gold's drop was short-lived. Gold may rise again if the tension accelerates more in the next week.
But, if the tension doesn't accelerate, gold might drop hard. Next week we have a piece of massive news for gold. The US CPI (Inflation) reports will significantly impact the gold price. Especially next week's report is more significant than other times because next rate-hiking depends on the following week's CPI report. That's why next week's CPI report is critical.
Next week's CPI report will hint that the FED will hike 25 BPS or 50 BPS in March. Last week's average hourly earnings increased, so it is expected that the CPI will have more chances to rise. The positive CPI report than the forecast will be positive for the USD, and more chances will increase for gold's drop.
Technical View:
Technically, the gold price is holding below its trend support zone. So, technically it's in a bearish trend. As long as the gold's price is below the $1828/1833 price zone, it will not change its trend, and the bearish trend will remain.
After breaking below solid and long-term trendline support, it has created a bearish flag that indicates technically gold has chances to drop. But don't ignore the fundamentals (Russia and Ukraine Tension) because it supports gold price right now.
Immediate support is identified at the $1800 price zone from the present rate. Breaking below $1800 will open the door for a $1790 price zone for intermediate support. And finally, breaking below the $1790 will open the door for solid support $1780 price zone.
$1780 is strong support. If Russia and Ukraine crisis is solved, it is just a matter of time before the gold price will hit $1780. again, if next week's CPI also rises, that could be the matter of testing $1780 for the gold.
On the other hand, if Russia and Ukraine's tension keeps rising, gold has ample chance to rise again. Immediate resistance is identified at the $1815 price zone. Breaking above $1815 will open the door for a solid resistance level of $1828'/1833 price zone. Breaking above $1833 will continue its uptrends again.
Note
Gold chart and analysis updated...
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