Technical vs Fundamental Gold Analysis: XAUUSD Forecast for 11.03.2024 – 17.03.2024


Mixed US macro statistics in February 2024, as well as contradictory comments from Fed Chairman Jerome Powell, caused a sharp USD weakening and a fall in US government bond yields. As a result, the gold rate rose to a new high of 2195.00.

At the same time, technical and fundamental analysis indicate that the XAUUSD may continue to rise in the near future.

The article covers the following subjects:

Contents

Key Points

  • The gold price is heading to new highs.
  • New US inflation data can either strengthen the position of buyers or stop the XAUUSD growth.
  • Investors are focusing on resistance levels at 2195.00, 2200.00 and support at 2153.00, 2144.00.

Key fundamentals & events impaction to Gold price

From March 4 to March 10, 2024, gold futures rose above $2,200.00 per ounce due to increased demand for safe-haven assets. Investors also continue to buy gold in anticipation of the start of the Fed's monetary easing cycle. In the physical market, investors are also actively buying precious metals.

Fundamental analysis confirms the possibility of XAUUSD growth in the near future. The main factors are listed below:

  • uncertainty about global economic growth;
  • geopolitical conflicts and political risks, including the upcoming U.S. elections;
  • slowing inflation in the world's largest economies (primarily the United States), which creates the preconditions for lowering interest rates.

The price of gold is very sensitive to changes in the monetary policy of the world's largest central banks, primarily the Fed. An increase in interest rates usually leads to an increase in the cost of purchasing and storing the precious metal and a decrease in its value. Easing monetary conditions, on the contrary, contributes to an increase in demand for XAUUSD and its price.

Thus, if the release of US inflation data for February on March 12 (12:30 GMT) again indicates its slowdown, then expect further XAUUSD growth.

If the CPI indicators turn out to be stronger than predicted, this may cause USD strengthening and the gold rate decline.

For a more accurate forecast, let's conduct a technical analysis.

XAUUSD Technical outlook

At the beginning of March, the price broke out the upper border of the range of 2060.00 – 2003.00. As a result, XAUUSD accelerated its rise to the December 2023 high of 2134.00. At the beginning of the week starting March 4, 2024, the XAUUSD pair was already trading above $2140.00. The upward dynamics in the zone of medium-term (above key support 1985.00, EMA200 in the daily chart), long-term (above key support 1824.00, EMA200 in the weekly chart) and global (above the level of 1392.00, EMA200 in the monthly chart) bull markets continues.

The OsMA, RSI and Stochastic indicators on the XAUUSD price charts are also on the buyers’ side as they signal prevailing long trades.

The nearest support is located at the levels of 2153.00, 2144.00, 2134.00, the next one is at the local level of 2088.00. A breakout of the levels 2153.00, 2144.00, 2134.00 may become the first signal for opening short trades, and a breakout of the levels 2110.00, 2088.00 will become a confirming signal.

However, until the price reaches new resistance levels, focus on long trades.

  • Support levels: 2153.00, 2144.00, 2134.00, 2110.00, 2088.00, 2060.00, 2049.00, 2003.00, 2000.00, 1985.00, 1977.00, 1900.00, 1876.00, 1 824.00.
  • Resistance levels: 2195.00, 2220.00, 2300.00, 2400.00, 2500.00.

Weekly trading plan for gold

Logically, the high demand for gold will continue. An aggressive approach involves entering long trades in anticipation of further price rise. According to a moderate approach, enter long trades when the price rolls back to support levels with a subsequent upward movement. Don't forget about stop losses and risk management rules in your trading strategy.

How to trade XAUUSD: Trading Scenarios this week

The upward trend will continue amid high demand for gold.

Main scenario

In the main scenario, buyers will try to build on the success, as a result, the price may reach $2195.00.

  • Aggressively: Buy according to the market. Stop Loss 2153.00.
  • Moderately: Buy Stop 2197.00, 2200.00, 2203.00; Buy Limit 2153.00. Stop Loss 2143.00; Buy Limit 2145.00. Stop Loss 2132.00; Buy Limit 2135.00. Stop Loss 2123.00.
  • Targets: 2200.00, 2250.00, 2300.00, 2400.00.

Alternative scenario

An alternative scenario implies a breakout of local support at the level of 2134.00 which will trigger a further decline in quotes and return the price to the downward channel in the daily XAUUSD chart. The gold rate may decline to the important support level of 2049.00 (EMA50 on the daily chart). A breakout of the key levels of 2000.00, 1985.00 (EMA200 on the daily chart), 1977.00 (EMA50 and the lower line of the ascending channel in the weekly chart) will bring XAUUSD into the medium-term bearish market zone.

  • Aggressively: Sell Stop 2152.00. Stop Loss 2180.00.
  • Moderately: Sell Stop 2133.00. Stop Loss 2145.00; Sell Stop 2123.00. Stop Loss 2135.00, 2145.00.
  • Targets: 2110.00, 2088.00, 2060.00, 2049.00, 2003.00, 2000.00, 1985.00, 1977.00, 1900.00, 1876.00, 1824.00.

How to Trade XAUUSD Spot Gold Based on Today's NFP Data

Data on the US labor market, inflation and GDP are key indicators for Fed officials when determining further monetary policy.

At the same time, NFP (non-farm payroll dynamics) is a key economic indicator that affects the dollar exchange rate and the price of gold. Typically, trading the nonfarm payroll is based on either buying or selling USD.

If NFP data exceeds market expectations and leads to a stronger dollar, this could lead to a decline in gold price. In this case, consider opening XAUUSD short trades.

If NFP data is worse than expected, then consider XAU long trades.

However, trading the nonfarm payroll report can be risky, but at the same time profitable. Moreover, the market reaction to the publication of the report may be unpredictable, since previous results are often revised. The most cautious and conservative investors, despite the opportunity to get high profits, prefer to stay out of the market.

A report from the US Department of Labor published on March 8 indicated an increase in employment in the non-agricultural sector in February by 275.0 thousand. Despite this high figure, the dollar remained under pressure. Investors were probably alarmed by the rise in unemployment in February to 3.9% (from 3.7% in January) and the revision of the previous January NFP value from +353 thousand to +229 thousand. Also, do not forget about fundamental factors.

Forecast for the coming week (March 11–17, 2024) based on the NFP report publication

Scenario for XAUUSD growth:

  • Aggressively: Buy according to the market. Stop Loss 2177.00.
  • Moderately: Buy Stop 2197.00 (breakout of the week’s high of 2195.00). Stop Loss 2152.00 (below Friday's low).
  • Target levels: 2200.00, 2250.00, 2290.00, 2300.00, 2400.00.

Scenario for XAUUSD decline:

  • Aggressively: Sell according to the market. Stop Loss 2197.00.
  • Moderately: Sell Stop 2152.00, 2143.00, 2133.00. Stop Loss 2180.00.
  • Target levels: 2110.00, 2088.00, 2080.00, 2060.00.

Target zones of XAUUSD buy/sell trades.

 Buy Sell
L12200.00S12150.00
L22230.00S22140.00
L32250.00S32130.00
L42265.00S42110.00
L52280.00S52090.00
L62300.00S62000.00

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XAUUSD forecast for this week

If the CPI report on March 12 shows a slowdown in the US inflation, then expect further USD weakening and XAUUSD growth. Based on fundamental and technical analysis, gold may reach level 2300.00 by the end of the week.

An alternative scenario implies a correction of the US dollar, as well as the XAUUSD decline towards supports at 2153.00, 2144.00, 2134.00. In turn, their breakout could provoke a deeper gold correction.

WARNING: The information on these pages includes forward-looking statements that come with risks and uncertainties. The markets and instruments described here are only for informational purposes and should not be seen as advice to buy or sell these assets. It's important to conduct your own detailed research before making any investment decisions. The author cannot guarantee the accuracy, error-free, or timeliness of this information. Investing in the open market carries significant risks, including the potential loss of all or part of your investment and emotional distress. You are solely responsible for all risks, losses, and costs associated with investing, including the total loss of principal. The author is not liable for any information accessed through links provided on this page. No personalized investment recommendations are offered here. The author does not claim the information is accurate, complete, or suitable. The author will not be responsible for any errors, omissions, or any losses, injuries, or damages resulting from this information and its use. The author is not a certified investment advisor, and this content is not intended as investment advice. All performance data reflects past performance and is shown on a total return basis. Past performance does not predict future results, and current performance may vary from what is shown.


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Price chart of XAUUSD in real time mode

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