**Gold Market Update: Establishing a Daily Low and Charting the New Upside Potential**
*Based on the original analysis by Ross J. Burland, FXStreet.com*
*Extended and supplemented with additional market insights for a comprehensive overview*
As of early April 2024, gold prices continue to exhibit significant bullish momentum, driven by a range of macroeconomic factors and ongoing investor interest in safe-haven assets. The original analysis by Ross J. Burland from FXStreet provides critical insight into gold’s intraday movements, identifying the establishment of a potential daily low and the emergence of renewed upside potential. This expanded article draws on his conclusions while incorporating additional analysis and technical indicators to help traders better understand the current setup in XAU/USD (gold priced in US dollars).
## Key Market Drivers Behind Gold’s Movement
To understand recent developments in gold, it’s essential to examine the broader economic forces at play. These macro drivers are shaping sentiment and influencing technical patterns.
### 1. Federal Reserve Monetary Policy
– **Interest Rate Expectations**: Investors remain focused on the trajectory of U.S. interest rates. Recent comments from Federal Reserve officials suggest that they may begin easing policy later in 2024 if inflation trends continue toward the 2% target.
– **Real Yields**: Lower real yields (nominal yields minus inflation) typically support gold prices. Any indication of weaker economic growth or a dovish monetary stance tends to lead to declining real yields, which boosts demand for non-yielding assets like gold.
### 2. Inflation Trends
– **CPI and PCE Reports**: Inflation metrics such as the Consumer Price Index (CPI) and the Personal Consumption Expenditures (PCE) price index have shown signs of plateauing. However, sticky core inflation remains a concern.
– **Commodities and Energy Prices**: Rising oil prices, which have pushed above $85 per barrel at times, fuel inflation concerns and indirectly support gold as a hedge.
### 3. Geopolitical Tensions
– **Geopolitical Risk Premium**: Conflicts in Eastern Europe and the Middle East continue to generate a safe-haven bid for gold. Investors are using gold as insurance against geopolitical and economic shocks.
– **BRICS De-Dollarization Initiatives**: Talks about currency diversification and gold reserves among BRICS nations (Brazil, Russia, India, China, South Africa) have supported buying interest in bullion.
### 4. Central Bank Demand
– According to the World Gold Council, central bank gold purchases surged in 2023 and are expected to remain strong in 2024. This floor of institutional demand underpins the gold market and offers a buffer during short-term pullbacks.
## Technical Analysis: Defining the Landscape
Ross J. Burland identifies key structural levels that provide directional cues for the gold market. His analysis, which includes both price action and Fibonacci retracements on lower timeframes, points to the establishment of a daily low and a repositioning of the bulls.
### Intraday Focus: 4H and 1H Chart Analysis
– **4H Timeframe Insight**: The 4-hour chart suggests a pivot point at recent swing lows around $2,260 per ounce. Price action confirmed strong support near this level, evident by successive bullish rejections and wicks.
– **Fibonacci Trends**: A Fib retracement from the late March peak near $2,280 down to the recent low at $2,260 shows confluence at the 38.2% and 61.8% levels. The bounce from the 61.8% retracement level is supportive of a continued uptrend.
– **Corrective Structure**: The move lower is considered part of a corrective zig-zag pattern within a broader dominant bullish trend. If the low at $2,260 holds, a new bullish impulse wave may be underway.
### Trendline and Channel Analysis
– A rising trend
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