Gold attempts to retrace the decline from the end of March, and the price for bullion may exhibit a bullish behavior over the coming days as it initiates a fresh series of higher highs and lows.

TECHNICAL FORECAST FOR GOLD: BULLISH
The recent pullback in gold was short live as the precious metal bounced back from a weekly low of $1568, and the price for bullion may work its way towards the yearly high ($1704) as the COVID-19 pandemic spurs a flight to safety.

Keep in mind, prior to the coronavirus, the reaction to the former-resistance zone around $1447 (38.2% expansion) to $1457 (100% expansion) helped to rule out the threat of a Head-and-Shoulders formation, with a similar scenario taking shape in March after the price of gold took out January low ($1517).

The former resistance zone may continue to act as support as the weakening outlook for growth saps investor confidence, and the rebound from the March low ($1451) may continue to unfold in April as the price of gold initiates a fresh series of higher highs and lows.

The opening range for 2020 instilled a constructive outlook for the price of gold as the precious metal cleared the 2019 high ($1557), with the Relative Strength Index (RSI) pushing into overbought territory during the same period.

A similar scenario materialized in February, with the price of gold marking the monthly low ($1548) during the first full week, while the RSI broke out of the bearish formation from earlier this year to push back into overbought territory.

However, the price of gold has failed to maintain the monthly opening range for March after trading to a fresh yearly high ($1704), with the recent decline producing a break of the January low ($1517).

Nevertheless, the reaction to the former-resistance zone around $1450 (38.2% retracement) to $1452 (100% expansion) casts a constructive outlook for bullion especially as the RSI reverses course ahead of oversold territory and breaks out of the bearish formation carried over from the previous month.

Need a close above the Fibonacci overlap around $1627 (61.8% expansion) to $1635 (78.6% retracement) to bring the $1655 (161.8% expansion) region on the radar, with the next area of interest coming in around $1676 (78.6% expansion) followed by the yearly high ($1704).

GOLD PRICE ANALYSIS: GOLD RALLIES AS NFP REPORT LOOMS, EMPLOYMENT DATA SIGNALS MASSIVE JOB LOSSES AMID CORONAVIRUS LOCKDOWN
Gold topped $1,600 with the help of another dismal jobless claims report indicating a recession is likely unavoidable due to the ongoing coronavirus pandemic

Gold price action faces a major technical resistance test, but fundamental tailwinds, like FOMC asset purchases and the expected freefall in NFP data, could fuel a breakout
The precious metal might experience selling pressure if the upcoming nonfarm payrolls report sparks a flight into cash as the preferred safe-haven asset in lieu of gold
Spot gold (XAU/USD) jumped back above the $1,600/oz price level on Thursday in an extension of gains recorded during the prior trading session.The 1.5% spike in gold was driven largely by a terrifying rise in furloughed and laid off workers reported in back-to-back weeks of record-breaking jobless claims. Latest jobless claims data sends an ominous message ahead of the upcoming NFP report release due Friday, April 03 at 12:30 GMT.

GOLD COULD CLIMB WITH US NONFARM PAYROLLS SET TO PLUNGE, UNEMPLOYMENT RATE TO SKYROCKET
Gold Price vs US Unemployment Rate Chart Monthly NFP Nonfarm Payrolls
On that note, if the unemployment rate or net change in nonfarm payrolls materially miss consensus estimates of -100K and 3.8% respectively, the price of gold might springboard toward year-to-date-highs, as investors digest economic reality from the number of unemployed workers due to the ongoing coronavirus lockdown.

GOLD PRICE OUTLOOK REMAINS BULLISH AS FEDERAL RESERVE BALANCE SHEET BALLOONS
Gold Price Chart Federal Reserve Balance Sheet Fed Total Assets FOMC
With the Fed exhausting one of its primary monetary policy tools used to boost the economy by cutting the benchmark Fed funds rate to zero, often referred to as hitting the zero-lower bound, the US central bank has reverted to an unconventional measure adopted during the last financial crisis: quantitative easing.
Correspondingly, the Federal Reserve balance sheet has embarked on a near-vertical trajectory after exploding 40% last month to $5.81 trillion from $4.16 trillion. This wave of QE from the Fed, an unprecedented liquidity and inflationary stimulus supplemented by a $2 trillion coronavirus relief bill passed by the US government, stands to keep gold prices supported.

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That said, as hard economic data paints a gloomy depiction of economic fallout caused by the coronavirus, perhaps like the upcoming NFP report, gold price action could soar in response. In addition to the precious metal’s safe-haven appeal, this is considering global central banks and governments will likely continue or ramp up recent stimulus efforts.

At the same time, the risk that another stock market rout might pressure gold back lower lingers during these volatile market conditions. Also, the technical backdrop behind XAU/USD is more ambiguous and less inspiring than its bullish fundamental underpinnings. Spot gold faces a negatively-sloped trendline of resistance extended through the series of lower highs recorded last month, which could serve as a short-term bearish headwind.

If the upcoming NFP report sparks a positive reaction in gold price action, the March 26 intraday high near $1,647 comes into focus as the first major obstacle faced by bullion bulls before targets are set on the March 09 peak above the $1,700 mark.

Looking to the downside, technical support might be found around the 50-day simple moving average, in addition to a confluence of Fibonacci retracement levels around the $1,575 price. If gold selling accelerates, XAU/USD bears could look toward the $1,545 and $1,505 zones for support.

The March range in Gold was almost 15% (14.8%, to be exact).
While coronavirus slowdowns are showing in some of the largest economies on Planet Earth, Central Banks have rushed into markets with a historical level of accommodation, which helps to explain the reason behind that uncertainty. The more pressing matter for traders is which side might continue to show through the start of Q2.

GOLD PUTS IN MASSIVE MOVE IN MARCH, BUT GOES NOWHERE ON NET
The book is now closed on Q1 of 2020 and, for probably most people out there, that’s a fact to be thankful for. It was a historically bad quarter for a number of reasons; both from an economic and a humanitarian perspective. In the Dow Jones Industrial Average, the index lost approximately 23%, marking for the worst Q1 in the index’s history and the worst quarterly outing since 1987 around the S&L crash. The S&P 500 was down a more moderate 20%; and this was the worst quarter in that index since the Financial Collapse.

In response, global governments tried to rush to the aid of their local economies with a number of stimulus programs and Central Bank initiatives in the effort of stemming the near-certain slowdown that would emanate from wide-scale shutdowns and social distancing strategies. This is just now beginning to show in economic data and, likely, this will continue to show in the weeks and months ahead.

Normally, a risk factor of this nature would be expected to bring strength into Gold prices, driven by the anticipation that Central Banks around-the-world would keep the printing presses running in an effort of providing ample liquidity to global markets… but that didn’t happen last month in Gold prices. Gold took a massive hit after the emergency rate cut out of the FOMC, which was coupled with an announcement of stimulus. Gold price action cratered from a test above the 1700 level all the way down to the 1450 neighborhood – a move of 14.8% in a ten days. A portion of that sell-off was clawed back later in March, making for a long-legged Doji on the monthly chart, which highlights extreme indecision in a market.

Taking a shorter-term look at the matter, unfortunately, doesn’t offer much more for trend biases as recent price action has been vicious on both sides of the market. There has, however, been some form of adherence to some longer-term technical studies that may continue to provide some workable intelligence. Last month’s lows sync with the November, 2019 swing lows, and this comes in around the 38.2% Fibonacci retracement of the 1999-2011 major move.

Resistance, on the other hand, has now shown twice in the zone that runs from 1680-1700, the former of which is the 14.4% retracement of the 2008-2011 major move.

While March price action takes on the appearance mean reversion, traders would likely want to be very careful with range strategies in Gold markets, especially given the long-legged doji that printed last month, which may be highlighting a significant break in one direction or the other in the weeks or months ahead. This can highlight the attractiveness of both breakout and reversal strategies; as trends may not last long enough to allow for re-entry and momentum may run into a brick wall should the tide of the headlines turn in one direction or the other.

Taking an even shorter-term look at the matter, and adding a Fibonacci retracement around the major move that showed up in March, and traders can get some additional levels of interest that could be worked with for either breakout or reversal scenarios. Price action is currently digging into support around the 50% marker of that major move; and the 38.2% retracement sitting just above at 1607 could be a point of interest for follow-through resistance. Beyond that, the 1628 level looms large, this the 23.6% marker from that 1999-2011 major move; after which the zone from 1641-1649 becomes of interest.

XAU/USD breakout stalls into April open- near-term focus on reaction off 1585
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Gold prices surged more than 13% off the monthly lows with last week’s breakout stalling into the close of March trade. While the broader outlook remains weighted to the topside, the advance remains vulnerable into the April open and we’re looking to a reaction off support for guidance. These are the updated targets and invalidation levels that matter on the XAU/USD technical charts. Review my latest Weekly Strategy Webinar for an in-depth breakdown of this gold trade setup and more.

Gold Price Chart – XAU/USD Daily – GLD Technical Forecast – GC Trade Outlook
Chart Prepared by Michael Boutros, Technical Strategist; Gold on Tradingview

Technical Outlook: In my last Gold Price Outlook we noted key support, “at 1547/52 with a breach higher from here exposing subsequent resistance objectives at 1649.” XAU/USD registered a high at the 76.4% retracement at 1643 last week before settling with price continuing to range just above the March open / 61.8% retracement at 1585- now key near-term support. Broader bullish invalidation remains steady at 1547/52 with a topside breach exposing subsequent resistance objectives at the high-day close at 1678.

Gold Price Chart – XAU/USD 120min – GLD Trade Outlook – GC Technical Forecast
Notes: A closer look at Gold price action sees XAU/USD breaching above descending pitchfork resistance with subsequent breakout failing to offer any follow-through. Price is now riding former slope resistance as support. Key lateral levels eyed at 1585 backed by1569- a break there would risk a larger decline with such a scenario eyeing subsequent support objectives eyed at 1547/52 and the yearly open at 1520. Weekly open resistance stands at 1617 with a breach above 1643 needed to fuel the next leg higher towards the high-day close at 1678- look for a larger reaction there IF reached.

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Bottom line: The gold price breakout has stalled here and while the broader outlook remains weighted to the topside, the immediate recovery may be vulnerable while below last week’s high. From at trading standpoint, look for downside exhaustion / possible long-entries while above the monthly open but ultimately a larger pullback may offer more favorable entries with a breach of the highs needed to keep long-bias viable. Keep in mind we’re heading into the close of the month / quarter – use caution heading into the April opening-range. Review my latest Gold Weekly Price Outlook for a closer look at the longer-term XAU/USD technical trading levels.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

Gold Trader Sentiment – XAU/USD Price Chart – GLD Technical Forecast – GC Trade Outlook
A summary of IG Client Sentiment shows traders are net-long Gold- the ratio stands at +2.73 (73.22% of traders are long) – bearishreading
Long positions are2.29% lower than yesterday and 12.95% lower from last week
Short positions are 15.39% higher than yesterday and 23.59% higher from last week
We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Gold prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current Gold price trend may soon reverse higher despite the fact traders remain net-long.

Gold prices headed for their best week since 2008, rallying about 8.25% over the course of the past 5 trading days. From a fundamental standpoint, the anti-fiat yellow metal capitalized on a broad pullback in the US Dollar as equities soared. Helping to contribute to this dynamic was a combination of open-ended QE from the Federal Reserve and the US $2 trillion fiscal stimulus package to help combat the coronavirus outbreak.

GOLD BROADER OUTLOOK
Focusing on technical analysis, XAU/USD bounced after prices found support at lows from the latter half of last year. This makes for a barrier between 1445 to 1459 along with what could be a potential rising trend line from May 2019 on the daily chart below. Gold prices then climbed through lows achieved in January and February which make for an inflection point between 1536 to 1550.

The aggressive rise in gold last week – matching gains observed 12 years ago – sent the yellow metal back towards peaks reached earlier this month. That makes for key resistance between 1679 to 1703. Coincidentally, this range includes the 2013 high at 1697. If XAU/USD can manage to clear this barrier and confirm a daily close above it, gold could set course to target peaks last seen in 2012 at 1795. On the way bullion could encounter the 61.8% Fibonacci extension at 1721.

GOLD NEAR TERM PICTURE
Zooming in on the 4-hour chart can help paint a better picture of what could be in store in the near term to help account for elevated volatility. Here I have pointed out that gold’s ascent slowed as prices consolidated between 1594 and 1645. There may be a support line forming from March 19. A third validation point can confirm this rising trend line and if it holds, gold could be guided higher to retest peaks from earlier this month.

Yet I have also noted the presence of negative RSI divergence, a sign of fading upside momentum. This can precede a turn lower, particularly if gold pushes under 1594 and confirms the breakout. If the latter is the case, the yellow metal could set up to test the inflection point between 1536 to 1550 pointed on the daily chart. If this area is cleared, a retest of current March lows could be due.

GOLD FORECAST:
Gold suffered an abrupt decline to the $1,450 level two weeks ago
Moving off support, gold may continue higher in the days ahead as governments and central banks flush the global economy with stimulus
A break above the recent high around $1,700 would be an encouraging sign for bulls looking to pursue an extension higher
GOLD PRICE OUTLOOK: STIMULUS MAY PROPEL XAU/USD PAST RESISTANCE
Gold has experienced significant volatility alongside other markets as the coronavirus looks to hamstring the global economy. To calm speculative activity, the CME raised margin requirements on gold futures by 19.3% Wednesday, the first such move in over a decade. Regardless, gold prices may continue to climb in the weeks ahead as governments and central banks flush the global economy with stimulus and volatility ebbs.

Since investors typically view gold investments as a hedge against inflation, the expansion of the Fed’s balance sheet – alongside other major central banks – should act as a consistent tailwind for gold prices. Together with the unprecedented stimulus package from the United States government, the ingredients for inflation are present. Therefore, assuming risk aversion does not spark further liquidation in the gold market as it may have last week, gold could look to reclaim recent highs around the $1,690 and $1,700 levels.

To be sure, bulls will look to employ nearby support areas to keep price afloat in the interim. To that end, the nearby Fibonacci level at $1,585 may offer early assistance should prices begin to fall again. Secondary and tertiary support should materialize at the $1,550 and $1,450 levels as it did in the last three weeks. For the time being, it seems as though $1,450 marks the bottom of the recent retracement so a break beneath this leave would undermine my bullish bias and could suggest further selling is in store.

GOLD PRICE TALKING POINTS
The price of gold retraces the decline from earlier this month as the Federal Reserve deploys more unconventional tools to curb the weakening outlook for growth, and the precious metal appears to be making a run at the yearly high ($1704) following the reaction to the former-resistance zone around $1450 (38.2% retracement) to $1452 (100% expansion).

GOLD PRICE EYES 2020 HIGH FOLLOWING REACTION TO FORMER RESISTANCE ZONE
The price of gold carves a series of higher highs and lows as the Federal Open Market Committee (FOMC) expands the use of its non-standard tools, with the central bank pledging to establish a“Main Street Business Lending Program to support lending to eligible small-and-medium sized businesses.”

It seems as though major central banks will continue to push the limits of monetary policy as their benchmark interest rate sit near zero, and the FOMC along with its counterparts may take additional steps to combat the supply/demand shock amid the growing number of coronavirus cases.

The wave of monetary and fiscal stimulus should help to cushion the world economy especially as US Treasury Secretary Steven Mnuchin tweets that G7 officials “will work together to restore economic growth and protect jobs and businesses,” but the slew of non-standard measures may ultimately lead to unintended consequences as central banks push monetary policy into uncharted territory.

With that said, the low interest rate environment may act as a backstop for goldas marketparticipants look for an alternative to fiat-currencies, and the broader outlook for bullion remains constructive as the reaction to the former-resistance zone around $1450 (38.2% retracement) to $1452 (100% expansion) helped to rule out the threat of a Head-and-Shoulders formation.

The opening range for 2020 instilled a constructive outlook for the price of gold as the precious metal cleared the 2019 high ($1557), with the Relative Strength Index (RSI) pushing into overbought territory during the same period.
A similar scenario materialized in February, with the price of gold marking the monthly low ($1548) during the first full week, while the RSI broke out of the bearish formation from earlier this year to push back into overbought territory.
However, the price of gold has failed to maintain the monthly opening range for March after trading to a fresh yearly high ($1704), with the recent decline producing a break of the January low ($1517).
Nevertheless, the reaction to the former-resistance zone around $1450 (38.2% retracement) to $1452 (100% expansion) casts a constructive outlook for bullion especially as the RSI reverses course ahead of oversold territory and breaks out of the bearish formation carried over from the previous month.
Need a break/close above the Fibonacci overlap around $1627 (61.8% expansion) to $1635 (78.6% retracement) to bring the $1655 (161.8% expansion) region on the radar, with the next area of interest coming in around $1676 (78.6% expansion) followed by the yearly high ($1704).

SILVER, GOLD PRICES TALKING POINTS:
Silver and gold have fallen this year despite heightened economic uncertainty
Investors stung by losses elsewhere have sold their metal holdings to raise cash
This process may now be winding down
Silver and gold prices behaved more like traditional haven alternatives to major currencies this week, rising on Monday when US authorities announced massive stimulus to try and deal with the economic fallout of coronavirus.

The Federal Reserve revealed unprecedented measures allowing its monetary watchdogs to buy Treasuries and agency mortgage-backed securities ‘in the amounts needed.’ This is effectively unlimited Quantitative Easing.

Of course, it should be no surprise that this move gave precious metals a lift. One function they fulfil in the markets is as a counterweight to so-called fiat currencies backed by nothing more than the full faith and credit of their various administrations.

WHY DID THE HAVENS FALL?
However, this year has seen some strange goings-on in the precious metals market. Supposedly also a final haven in times of financial stress, both silver and gold have seen prices fall sharply this month, even as the potential full, terrible economic impact of the contagion became apparent.

While this is perhaps counterintuitive it is at least readily explicable and, in passing, a reminder that no financial market, not even the very oldest, behaves as expected all the time. The price highs seen at the start of this year proved just too tempting for investors facing losses elsewhere, particularly in stricken global stock markets. They cashed out of silver and gold to cover them, quite rationally.

However, this week things have changed with precious metal prices rising again as markets move to price in long-term credit easing, stimulus and weak growth.

From here on it may well be that both silver and gold start to trade again more like traditional haven assets, for which bad news turns out to be very good news in deed for bulls.

That said it will still be wise to view brisk price rises with suspicion. Sharp falls in other markets may yet leave gold and silver vulnerable to liquidation trades as they have been so clearly this year already.

Traders should also beware of viewing these markets in purely financial terms. It’s always as well to remember the physical realities of any commodity market. The coronavirus will mean shutdowns and other bottlenecks for gold and silver production just as it will for most other commodities. There already reports of massive disruption to silver supply from major producers in Chile, Argentina and Peru.

Industrial users will be forced to pay a premium in order to get the metal they need, at least in the short term. This may not be sufficient to alter overall financial market sentiment towards the precious complex, but it’s certainly worth bearing in mind.

SILVER, GOLD RESOURCES FOR TRADERS
Whether you’re new to trading or an old hand DailyFX has plenty of resources to help you. There’s our trading sentiment indicator which shows you live how IG clients are positioned right now. We also hold educational and analytical webinars and offer trading guides, with one specifically aimed at those new to foreign exchange markets. There’s also a Bitcoin guide. Be sure to make the most of them all. They were written by our seasoned trading experts and they’re all free.

GOLD SHIES AWAY FROM LATE-NOVEMBER LOW
A range of fundamental factors forced gold over the week, before Friday’s relief rally tempered losses, but the backdrop remains cloudy. Gold’s safe-haven status is currently being questioned as the US dollar runs amok, but the daily chart is showing of reduced selling pressure, despite highly volatile market conditions. For the precious metal to rebound further, volatility needs to calm and the long-term moving average needs to be broken and closed above.

Short-term Fibonacci levels show 23.6% retracement at $1,510.7/oz. and 38.2% retracement at $1,547.5/oz. with the 200-dma in between around $1,522/oz. A break and close above this longer-dated moving average is needed if gold is to lose its current negative sentiment. A series of lower highs off the March 9 peak has been broken today and needs to be consolidated, while fresh higher lows early next week would also aid bullish sentiment. To the downside, the late-November low at $1,445.7/oz. held this week and could continue to provide support looking ahead. Ahead of this, recent daily lows between $1,465/oz. and $1,472/oz. may cause sellers to pause.

The ATR indicator shows the extreme levels of volatility in the gold market, making trading difficult. Traders need volatility in a market, but the current levels are causing wild swings that indiscriminately take out stops, especially if they are set too tight. Traders may need to pare back their trading size when considering a gold trade to allow themselves more room on their stop loss. Strong risk management is a prerequisite when trading, and doubly so in these markets.

Gold prices have had a tough past ten days, falling from above 1700 down to 1451, totally a loss of almost 15% in less than two weeks.
While Gold is often considered a safe-haven, in extreme scenarios of panic, cash often takes preference, as has been seen since the seven-year-high was set on March 9th.
Gold is now nearing a key zone of support. Global governments have launched massive bazookas. Will Gold bulls respond by hitting the bid?

GOLD CRUSHED AS DASH FOR CASH DOMINATES GLOBAL MARKETS
Gold is often considered a safe-haven asset; something that can benefit during times of stress or panic as investors duck for cover. This isn’t always the case, however, as can be evidenced from what took place in March of 2008 into October of the same year. March of 2008, of course, is when Bear Stearns went bankrupt; and this was followed by Lehman in September. Shortly after that, the government got to work with TARP passing through Congress and then the Fed getting to work with QE.

The next three years brought a massive bullish trend as Gold prices moved-up from an October 2008 low of 681.75 up to a 2011 high of 1920. But – when the panic was at its highest, as Bear Stearns and Lehman were getting hit – Gold prices softened by more than 33.9%.

This highlights how deflationary backdrops, particularly panic-prone scenarios can see a flight-to-quality that not only ignores Gold but treats it in a very bearish manner. This would appear to be what’s taken place over the past few week as Gold prices have cratered from a seven-year-high above 1700 to a multi-month low around the 1450 level. Gold prices are fast approaching a batch of support that had come into play of August of last year. This is around the 1447 level, which is the 38.2% retracement of the post-Financial Collapse major move, spanning the 2008 low up to the 2011 high.

Taking on a shorter-term look at the near-term scenario, and Gold prices have quickly moved from an overbought state to a near-oversold state on the daily chart. And a big difference here from the above mention of 2008: In that prior scenario it took the fall of Lehman to really kick the Federal Government into gear. This time – both Congress and the Fed wasted little time in attempting to address the worry enveloping markets. It just, hasn’t yet ‘worked,’ as was looked at in today’s webinar.

But, aligning the backdrop and considering the compendium of facts can make the long side of Gold as potentially attractive; especially for those that are looking for a bit of pressure release in the US Dollar after a massive run of strength there. This would be a reversal scenario given the gravity of the recent sell-off, so traders would likely want to proceed with caution considering the counter-trend nature of such a setup. Resistance potential exists at the 1500 psychological level followed by the 1528 Fibonacci level. Below current support around the Fibonacci level lodged at 1447.57, deeper support interest may show around the 1400 area, which had previously provided a bit of support as the bullish trend was building in August of last year.