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Gold Price Could Surge If It Clears This Hurdle

Aayush Jindal

Aayush Jindal

Key Highlights

  • Gold price started a fresh increase above the $1,910 resistance.
  • A major bearish trend line is forming with resistance near $1,925 on the 4-hours chart.
  • EUR/USD and GBP/USD slowly moved lower.
  • The US ISM Manufacturing Index could decline from 48.4 to 48.0 in Jan 2023.

 

Gold Price Technical Analysis

Gold price found support near $1,900 against the US Dollar. The price started a steady increase above the $1,905 and $1,910 levels.

The 4-hours chart of XAU/USD indicates that the price gained pace above the $1,912 resistance zone. There was a clear move above the 38.2% Fib retracement level of the downward move from the $1,949 swing high to $1,900 low.

It is now facing a strong resistance near $1,925. There is also a major bearish trend line forming with resistance near $1,925 on the same chart.

The main resistance is near the $1,930 zone, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours). A close above the $1,930 level might send the price further higher.

The next major resistance is near the $1,938 level. Any more gains might send the price towards the $1,950 resistance level, above which gold price might visit the $2,000 resistance.

On the downside, an initial support is near the $1,912 level. The next major support is near the $1,905 level. The main support is near $1,900, below which gold price might struggle to stay above the $1,880 zone. In the stated case, gold price could slide towards the $1,850 support.

Looking at EUR/USD, the pair corrected lower below the 1.0850 level and there is a risk of more downsides in the short-term.

Economic Releases to Watch Today

  • Germany’s Manufacturing PMI for Jan 2023 - Forecast 47, versus 47 previous.
  • Euro Zone Manufacturing PMI for Jan 2023 – Forecast 48.8, versus 48.8 previous.
  • UK Manufacturing PMI for Jan 2023 – Forecast 46.7, versus 46.7 previous.
  • Euro Zone CPI for Jan 2023 (YoY) (Prelim) - Forecast +9%, versus +9.2% previous.
  • Euro Zone Core CPI for Jan 2023 (YoY) (Prelim) - Forecast +5.1%, versus +5.2% previous.
  • US Manufacturing PMI for Jan 2023 – Forecast 46.8, versus 46.8 previous.
  • US ISM Manufacturing Index for Jan 2023 – Forecast 48.0, versus 48.4 previous.