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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Gold update: gold could find it tough to crack $2000

Gold could find it tough to break above the key psychological $2000 as risk appetite appears to be stabilizing. What’s next for the yellow metal?

Source: Bloomberg

Gold technical outlook - neutral

Gold could find it tough to break above the key psychological $2000 as risk appetite appears to be stabilizing.

First Citizens BancShares takeover of a large part of Silicon Valley Bank, UBS’ move to acquire Credit Suisse, and the willingness of regulators to provide liquidity/backstop facilities have provided comfort to investors that the worst banking shock since the Great Financial Crisis would be contained.

XAU/USD daily chart

Source: TradingView

XAU/USD has risen over 10% since the end of February as worries regarding the global financial sector have overshadowed still-strong US data (US Economic Surprise is at a fresh 10-month high), boosting the safe-haven appeal of the yellow metal.

Moreover, expectations of a sooner-than-expected pause in the US Fed rate hiking cycle have weighed on US yields, supporting the non-interest-bearing asset.

XAU/USD weekly chart

Source: TradingView

The key focus is now on US Core PCE Price Index for February due on Friday, which is expected flat at 4.7% on-year. A stronger-than-expected print could dent expectations regarding a Fed rate cut. Last week, the Fed indicated it was on the verge of pausing further rate hikes, prompting markets to price in a rate cut as early as Q3-2023.

On technical charts, a negative divergence on the daily and weekly charts indicates XAU/USD’s rally is showing signs of fatigue as it tests crucial psychological and technical resistance (including the April 2022 high) at 2000. To be sure, a retreat isn’t imminent.

Any break below immediate support at the mid-March low of 1934 would confirm that the upward pressure had faded in the interim. Such a break would trigger a minor double top (the late-March highs), opening the way toward 1875.

Gold’s sharp rebound came about from near-strong support at the end-February low of 1804, coinciding with the 89-day moving average.

XAU/USD 240-minute chart

Source: TradingView

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