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Gold Price Recovery Faces Hurdles, Bitcoin Dives

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Aayush Jindal

Key Highlights

  • Gold prices are struggling to recover above the $2,040 resistance.
  • A key bearish trend line is forming with resistance near $2,040 on the 4-hour chart.
  • Bitcoin price declined heavily and traded below $40,000.
  • The US Manufacturing PMI could remain at 47.9 in Jan 2023 (Preliminary).

Gold Price Technical Analysis

Gold found support near the $2,000 zone against the US Dollar. It started a recovery wave above the $2,020 zone but now faces a lot of hurdles.

The 4-hour chart of XAU/USD indicates that the price climbed above the 50% Fib retracement level of the downward move from the $2,062 swing high to the $2,001 low. However, the bears are still active near the $2,040 zone.

Gold is trading below the 100 Simple Moving Average (red, 4 hours) and the 200 Simple Moving Average (green, 4 hours). There is also a key bearish trend line forming with resistance near $2,040 on the same chart.

The trend line is near the 61.8% Fib retracement level of the downward move from the $2,062 swing high to the $2,001 low. An upside break above the $2,040 level could send the price soaring toward the $2,060 resistance. The next major resistance is near the $2,080 level, above which Gold could test $2,100.

Initial support is near the $2,015 level. The first major support sits at $2,000. Any more losses might call for a move toward the $1,975 level in the coming days.

Looking at Bitcoin, there was strong selling pressure and the bears managed to push the price below the $40,000 level.

Economic Releases to Watch Today

  • Germany’s Manufacturing PMI for Jan 2023 (Preliminary) - Forecast 43.7, versus 43.3 previous.
  • Germany’s Services PMI for Jan 2023 (Preliminary) - Forecast 49.5, versus 49.3 previous.
  • Euro Zone Manufacturing PMI for Jan 2023 (Preliminary) – Forecast 44.8, versus 44.4 previous.
  • Euro Zone Services PMI for Jan 2023 (Preliminary) – Forecast 49.0, versus 48.8 previous.
  • UK Manufacturing PMI for Jan 2023 (Preliminary) – Forecast 46.7, versus 46.2 previous.
  • UK Services PMI for Jan 2023 (Preliminary) – Forecast 53.2, versus 53.4 previous.
  • US Manufacturing PMI for Jan 2023 (Preliminary) – Forecast 47.9, versus 47.9 previous.
  • US Services PMI for Jan 2023 (Preliminary) – Forecast 51.0, versus 51.4 previous.
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