Home » Technical Analysis » Spot Gold Remains Capped by $1,740 per Ounce

Spot Gold Remains Capped by $1,740 per Ounce

Spot  gold

Looking at the widely traded spot gold futures contract, on the above hourly MT 4 price chart, gold is trading lower from the intra-session low of $1,726 per ounce. The yellow metal has stiff upside resistance in play at $1,740 per ounce.

Spot gold traders sent gold higher, at first, as U.S. President Joe Biden gave his first prime-time speech. He marked the universe of the first global coronavirus pandemic (Covid-19) outbreak and lockdown. He said the United States is now coming through the pandemic.

President Joe Biden’s first words, he praised his administration during his first two months of fighting the coronavirus pandemic and promised that all American adults will have access to the coronavirus vaccine by May first. President Joe Biden also took a victory lap over the passing of the massive $1.9 trillion pandemic fiscal stimulus bill. He is worried, however, about the labor market.

The financial markets did not react much to President Joe Biden’s speech. The recently passed $1.9 trillion stimulus was already priced in. Financial market participants wanted to hear more details about his $2.5 trillion proposed infrastructure plan. The White House had also delivered remarks before his speech so the importance of his event was muted.

Financial market sentiment is fairly positive headed into the weekend as the United States appears on the road to recovery from the pandemic’s economic impact. The coronavirus vaccine from Novavax cheered sentiment even further when they said their trial was effective against the UK coronavirus mutation.

Daily Spot Gold Technical Analysis

Looking at price action on the above hourly MT 4 price action chart, the spot gold futures contract (XAU/USD) has initial upside resistance at the ten hour simple moving average. This level lines up at $1,712 per ounce.

While trading above $1,700 per ounce, prices could focus on the upside barrier in play at $1,765 per ounce. A daily close below $1,700 opens the door to challenge the downside barrier lining up at $1,650 per ounce.

About David Frank

David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.

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