Gold (XAU/USD) has recently seen a significant surge in its weekly gain, marking a 2.33% increase on 1 March 2024. This spike represents the highest weekly gain year-to-date and the best return seen in the past three months. Positive technical indicators and a softer real US 10-year Treasury yield below 2.15% are reinforcing the potential for a major bullish breakout scenario for Gold (XAU/USD).
Over the last two weeks, the price actions of Gold (XAU/USD) have shown a notable uptick after a period of sideways movement since late December 2023. With a weekly gain of 2.33% for the week ending 1 March 2024, Gold is displaying bullish elements from a technical standpoint. Analysis across different asset classes suggests the onset of a medium-term bullish impulsive price action structure for Gold (XAU/USD).
The real US 10-year Treasury yield has recently dipped below the critical 2.15% threshold. This downward trend, marked by a -19 basis points shift from its recent high of 2.05% on 23 February, indicates a potential medium-term downwards trajectory. Technical elements such as reintegration below the 200-day moving average and the presence of “prior lower highs” in the daily RSI momentum indicator suggest that the short-term uptrend may be waning. Gold (XAU/USD) is likely to benefit from a further decline in the US Treasury yield, given its historical inverse correlation with the metal’s prices.
Gold (XAU/USD) is currently testing the major range resistance zone of US$2,075/2,090 after a prolonged period of sideways movement. The recent uptick has led to the formation of a bullish candlestick pattern near the US$2,090 level, signaling a potential breakout. The weekly RSI momentum indicator hints at medium-term upside momentum, with the next resistance zone projected at US$2,210/US$2,260. In the short term, an extreme overbought level in the hourly RSI indicates a possible minor pullback towards the US$2,064 support level.
If Gold (XAU/USD) manages to hold above the key short-term pivotal support of US$2,040, it is likely to continue its bullish trajectory in the short to medium term. Failure to maintain this support level could trigger a corrective pullback towards the next intermediate support at US$2,015/US$2,008. The ongoing price actions of Gold (XAU/USD) suggest a potential bullish breakout, driven by positive technical indicators and a supportive macroeconomic environment.
Overall, Gold (XAU/USD) is painting a picture of resilience and strength in the face of market uncertainties. The recent surge in weekly gains and the positive technical outlook signal a potential bullish breakout scenario in the near future. As investors monitor key levels and market trends, Gold (XAU/USD) remains a key asset to watch for potential investment opportunities in the weeks ahead.
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