Gold (XAUUSD) Analysis – 5th April 2024

April gold analysis 2024


The Spot Gold price rebounded from the entry area, achieving new peaks. Considering the recent high levels, I anticipate a potential market retreat towards the support range of 2240-2200, where the initial strong movement happened and liquidity was absorbed under the prior day’s minimum.But against the NFP data results and DXY performance, Gold Rally Continued to 2330-2360 ahead of Week Frame numbers. Expected Extension for this range will be 2390-2420-2450.

In general, I foresee a turbulent market situation as upward movements might reverse from the support threshold upon encountering adverse reports.

My objective is to reach the resistance range of 2373.00-2420.55 before considering a decline.

Gold is denominated in US dollars, meaning that when gold prices increase, it reflects a weakening of the dollar in the markets. Despite the US dollar being the top performer among G10 currencies in 2024, gold prices have surged by 11% since the year began, following a 13% increase in 2023. This trend is notable considering the robust state of the US economy. Historically, bullish sentiment for XAUUSD (gold priced in US dollars) tends to strengthen during periods of economic weakness in the United States.

Gold’s surge is primarily linked to geopolitical factors and ongoing de-dollarization efforts:

1.The conflict in Ukraine has resulted in extensive sanctions, dividing the world into Western and Eastern spheres.
2.Central banks, particularly those of China and Russia, are reallocating reserves away from US dollars and treasury bonds.
3.The shift towards gold reflects concerns about geopolitical stability and the US dollar’s status as a global reserve currency
4.That explains why bond rates and the XAUUSD are growing simultaneously and why the bulls in gold aren’t concerned about the risk of 10-year bond yields topping 4.5%.
The ongoing conflict in the Middle East further exacerbates the situation. Speculations about Iran’s potential involvement have already driven Brent crude oil prices above $90 per barrel, with potential for further increases. Investors are seeking safety in gold and divesting from the dollar, contributing to gold’s surge to $2,350-$2370 per ounce.
The surge in XAUUSD’s value isn’t solely attributed to its safe-haven appeal and de-dollarization trends. Market discussions increasingly highlight the role of institutional trading algorithms, which automatically initiate long positions when gold prices reach new highs, thereby amplifying bullish momentum. Should this hypothesis hold true, any downturn in gold could be as sharp as its upward rally.
A potential decline in gold below $2,268 per ounce may prompt a cascade effect of profit-taking from long positions, leading to selling pressure. Such a scenario could materialize in response to robust US jobs or inflation data. On the contrary, surpassing the $2,300 mark for gold could serve as a catalyst for increasing long positions.

Technical Levels and Analysis:

Key Support and Resistance Levels for XAU/USD are outlined for informed trading decisions.

Support Levels (S):
Resistance Levels (R):

Today’s Plan of Action and Level to Trade:

Buy at: $2285-$2310-$2340-$2370
Sell at: $2390-$2417-$2440-$2468

Risk: Not more than 5% should be taken

Targets: 15-20$ From Entries for 70% partial booking and 28-35$ range for 100% Booking.

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