Yellow Metal hit all predicted levels – Now what?

Gold prices made a historical high yesterday. Prices jumped more than 1.50%. As more signs of slowing economic growth fed into safe haven demand for the yellow metal.

Yellow metals rose abruptly, as after the U.S. dollar tumbled to a two-month low. Currency dropped towards day’s low 101.459 after weak data supported the view. That the Federal Reserve may not need to raise rates much further. While the New Zealand dollar hit two-month highs after a larger-than expected rate hike.

Data showing U.S. job openings in February dropping to the lowest in nearly two years. And the continued decline in factory orders, undermined the dollar. As the numbers indicated that rate hikes may be nearing an end.

Job openings, a measure of labor demand, decreased 632,000 to 9.9 million in February. The lowest since May 2021, according to the monthly Job Openings and Labor Turnover Survey, or JOLTS report.

 Further, the Reserve Bank of New Zealand unexpectedly raised interest rates by 50 (bps) to a more than 14 year high of 5.25%. In a Reuters poll, 22 of 24 economists had forecast just a 25 bps hike.  New Zealand now has the highest interest rates from among the G10, surpassing both the U.S.. Where rates are at 5%, and Canada, where they are at 4.50%.

Now US NFP data will decide its next move. Till then prices may show some consolidation. Data is to be released on Friday.  Before it, U.S. weekly employment claims, ISM Services PMI and ADP Non-Farm Employment Change will also have a significant impact on the bullion prices.

Technical Outlook

As expected on the 31 March outlook, after witnessing a temporary correction towards 59400-59300, GOLD prices rebounded sharply. And after breaching 60050, tested new high of 61181.00

On the above chart, Gold prices are yet trading above its previous week high and also breached 61.8% Fibonacci Retracement.

The recent technical aspects are still indicating a bullish momentum in the near future. However, after a big jump in recent trading sessions prices are expected to consolidate.

It’s expected that Gold prices may retreat towards 60500-60250 levels in days to come.  On the downside, crucial support is seen at 60180; if prices break it then there would be probability for next support 59950-59750.

On the upside, recent high 61181 will be a massive resistance and a break above prices may test new high 61540-61850.00