Gold can reach new heights
2023.01.20 13:01
Gold can reach new heights
On Thursday, the yellow metal regained its appeal against a backdrop of risk aversion, resulting in a sharp rise in gold prices. The fall upon gold’s strength despite its safe-haven status and slight rise in U.S. yields.
After three days of declines, the spot price is currently trading around $1,930 at the time of writing, registering a daily gain of 1.35 percent. By the end of the New York session, the metal had also reached a new nine-month high of $1,935.
Trader risk aversion has been stoked by disappointing macroeconomic data and hawkish comments from major central banks, which have rekindled fears of a U.S. recession. However, Wall Street indexes traded in the red on Thursday, with the posting of its third fall in a row. However, U.S. yields edged slightly higher on Thursday after the decline of the previous day.
According to indicators on the daily chart, the XAU/USD pair has a positive short-term bias from a technical perspective. However, the Relative Strength Index (RSI) has already reached overbought territory, which may indicate a phase of consolidation or a brief correction prior to a subsequent rise.
On the upside, the metal’s next bullish target is the $1,973 78.6% retracement of the $2,070 – $1,615 decline, followed by the $2,000 threshold, the final milestone before the aforementioned $2,070 2022 high. On the other hand, pullbacks should attract buyers around $1,900. If this mark were to fall, the 20-day SMA would be at $1,860.
