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Technical and fundamental analysis for Gold – April 2022

Published by Karl Martin Karus in category Technical & Fundamental analysis on 18.04.2022
Gold price (XAU-SEK)
18 387,17 SEK/oz
  
- 123,57 SEK
Silver price (XAG-SEK)
213,36 SEK/oz
  
- 0,87 SEK

Fundamental Analysis

April will be a rather data-heavy month, meaning there are French presidential elections, interest rates, and FOMC meetings, which all potentially affect precious metal prices in different currencies.

Let’s start with fundamental news, potentially affecting gold prices to move, especially since the war in Europe, Ukraine does not seem to end any time soon.

Russia’s central bank says it will stop buying gold at a fixed price

Russia is one of the world’s top gold producers. Still, after the Kremlin moved soldiers into Ukraine in February, the country’s refiners were forbidden from exporting bullion into the world’s largest market, London.

On March 25, the Russian Central Bank said it would buy gold at a fixed price of 5000 roubles a gram until June 30, Reuters wrote.

On April 7, the Russian Central Bank said that due to a “significant change in the market conditions, “it would buy gold from commercial banks at a negotiated price from April 8.

Since that announcement, the Russian rouble has strengthened sharply against the dollar.

  • On March 25, 5000 roubles = 52 US-dollars
  • On April 7, 5000 roubles = 63 US-dollars
  • The gold price has remained relatively stable on the international market, around 60 US dollars per gram or 1900 US dollars an ounce.

New decades-high inflation numbers coming?

March inflation data is scheduled to be released on Tuesday, and it will be one of the key releases to monitor. According to market consensus predictions, annual inflation is expected to reach 8.4%, a record four-decade high.

Read more in-depth about this topic from Kitco News.

Technical indicator analysis

Trendlines / Support & Resistance

*Red lines are downtrend. The heavy red line is the long-term trendline.
*
Green lines are uptrend. The heavy green line is a long-term trendline.
*
Blue lines are short term support & resistance lines

 


(Picture 1. Trendlines & Support/Resistance)

  • In March’s technical and Fundamental analysis, we speculated that gold price would come down to around 1910 USD/oz area.
  • After bulls pushed the gold price to almost all-time high levels at the beginning of March, we saw a sharp decline back to a strong support line around the 1910 USD/oz area.
  • Mentioned support area has been held firmly. Bulls don’t want to let bears take over.
  • Currently, there is a high probability for the price to move sideways between 1910 SUD and the 1960 area. When breaking either level, we can expect the price to either spike to near all-time high levels or correct itself to around 1850 USD/oz levels.

Moving Averages

  • Gold price is trading strongly above 250MA levels, which indicates a strong uptrend.
  • Correction is still possible, potentially near the 250MA line, which is around 1850 USD/oz, as mentioned previously.

RSI

  • The RSI indicator currently does not provide any clear indication of solid moves.
  • Gold price is moving sideways, and there is a high potential it keeps trading between 1910-1960 USD area for quite some time, maybe the whole of April.
  • It is vital to keep a close eye on soon-forming RSI divergences.

In conclusion, watching what the gold price will do in this data-heavy week is very important. When gold price breaks either support or resistance, the price will probably make a huge spike. Special interests are in the March inflation rates meeting on Tuesday (12. April 2022).


Disclaimer: This article is for informational purposes only and is not intended as an investment analysis or recommendation to sell or buy commodities. Tavex is not responsible for any decisions made based on this information. Investing is associated with opportunities and risks, and the market value of commodities can both increase and decrease. Past or future yields on the commodities and financial ratios shown above do not represent a promise or an indication of future earnings

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