GOLD - USD - Gold-dollar, daily - 03/04/2024 (GMT)

The gold price is currently near a two-month high due to subdued USD demand, a softer risk tone, and upcoming US data/events that could provide a fresh boost. The recent disappointing US macro data, like the decline in the second estimate of the GDP growth and lower than expected manufacturing PMI, as well as less-hawkish remarks by Federal Reserve officials have weakened the US Dollar, contributing to a supportive environment for the Gold price. The momentum created for gold on the other hand has been quite unexpected making it a rather risky choice for short-term traders but let's check the technical image as well to get a better understanding of the move.

From the technical point of view, gold price has broken above the bearish trading channel that was in effect since late 2023 while also breaking above the resistance of the 23.6% of the daily Fibonacci retracement level. The 50-day moving average is still trading above the 100-day moving average further validating the bullish momentum while the Stochastic oscillator has been pushed to extreme overbought levels. If the Dollar index (DXY) continues to decline in the coming sessions it would not be strange to see a retest of the all-time high level in gold prices near the $2,120 price area. In the event however of a correction then the first possible area of support might be found around the $2,020 which consists of the 38.2% of the Fibonacci retracement level, the dynamic area between the 50 and 100-day moving averages as well as the psychological support of the round number.