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Gold Price Recovery Could Face Hurdles, PMI’s Next

Aayush Jindal

Aayush Jindal

Key Highlights

  • Gold price started an upside correction from the $1,805 zone.
  • It broke a major bearish trend line with resistance near $1,815 on the 4-hours chart.
  • EUR/USD and GBP/USD started a decent recovery wave.
  • The US ISM Manufacturing Index could increase from 47.4 to 48.0 in Feb 2023.

 

Gold Price Technical Analysis

Gold price gained bearish momentum after it broke the $1,840 support against the US Dollar. The price traded close to the $1,800 level before the bulls appeared.

The 4-hours chart of XAU/USD indicates that the price traded as low as $1,804. It settled below the 100 simple moving average (red, 4-hours) and the 200 simple moving average (green, 4-hours).

Recently, there was an upside correction above the $1,815 level. The price broke a major bearish trend line with resistance near $1,815 on the 4-hours chart. There was a test of the 50% Fib retracement level of the downward move from the $1,845 swing high to $1,804 low.

The price is now facing resistance near the $1,830 level and the 200 simple moving average (green, 4-hours). The main resistance is near the $1,845 zone and the, above which the price might gain bullish momentum.

On the downside, an initial support is near the $1,815 level. The next major support is near the $1,805 level, below which gold price might struggle to stay above the $1,800 zone. In the stated case, gold price could slide towards the $1,780 support.

Looking at EUR/USD, the pair started a recovery wave from the 1.0535 zone and might rise further towards the 1.0680 resistance.

Economic Releases to Watch Today

  • Germany’s Manufacturing PMI for Feb 2023 - Forecast 46.5, versus 46.5 previous.
  • Euro Zone Manufacturing PMI for Feb 2023 – Forecast 48.5, versus 48.5 previous.
  • UK Manufacturing PMI for Feb 2023 – Forecast 49.2, versus 49.2 previous.
  • US ISM Manufacturing Index for Feb 2023 – Forecast 48.0, versus 47.4 previous.