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Technical and fundamental analysis for Gold – March 2022

Published by Karl Martin Karus in category Technical & Fundamental analysis on 14.03.2022
Gold price (XAU-SEK)
18 389,28 SEK/oz
  
- 121,46 SEK
Silver price (XAG-SEK)
213,39 SEK/oz
  
- 0,83 SEK

The tensions on a global scale are still very high, and 2-weeks after the Russian invasion of Ukraine and countless sanctions against Russia, the war is starting to show a significant impact on all financial market sectors.

Goldman Sachs sees gold price @2500 USD/oz by the end of 2022

“The last time that we saw all major demand drivers accelerate simultaneously was in 2010-2011 when gold rallied by almost 70 percent. Given the upward material revision in investment and demand assumptions, we now upgrade our 3 /6 / 12-month gold targets from $1950/2050/2150 an ounce to $2300/2500/2500 per ounce,” wrote Mikhail Sprogis, Sabine Schels, and Jeffrey Currie of Goldman Sachs in a recent note.

Gold price highest since August 2022

In terms of SEK

In terms of the Swedish Krona, the gold price has quickly gained a lot in value. The gold price has spiked roughly 20% since the beginning of February. In the second week of March 2022, the gold price reached a new historical high.

In terms of USD

The gold price almost touched the historical all-time high @2075 USD/oz in US dollars but did not breakthrough.

In terms of EUR

Because of the war in Europe, its currency euro has weakened a lot, and for that reason, gold made a historical all-time high @1900 EUR/oz on March 8th.

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 February’s technical and Fundamental analysis, we talked about the triangle wedge and a potential breakout from there.
  • On February 11th, gold bulls broke through a significant triangle wedge, and the price closed firmly above the downtrend line (upper line of the triangle).
  • From that point forward gold price has strongly spiked up.
  • There was a robust resistance area around 1912 USD/oz, but because of the increasing uncertainty in the World, gold bulls did not have much trouble breaking through that resistance area.
  • Since then, the gold price has shot up almost 90 degrees vertically – a significant price increase in a short time.

Fibonacci retracements (addition to Trendlined & Support/Resistance)

(Picture 2. Fibonacci tool)

  • Since gold price is trading near an all-time high, we must use the Fibonacci retracement tool, in order to determine a new potential all-time high.
  • According to the Fibonacci tool, the next important 61.8% retracement line is @2469 USD/oz.
  • This is a great time to remind you what we wrote at the beginning of the article – Goldman Sachs sees gold price @2500 USD/oz by the end of 2022.

Moving Averages

(Picture 3. – Moving Averages)

  • We can clearly see that roughly a year, gold was consolidating.
  • Gold was consolidating up and down between the rectangle is marked in picture 3.
  • Also trading very near to the 250MA line, bouncing up and down.
  • Since the first week of February gold has had a clear direction – straight up!
  • 250MA with price action (two bullish pin bar candles in a row just above 250MA line) – very strong bullish indicator.

RSI

  • RSI indicator is currently in an oversold area.
  • We have a strong uptrend and RSI indicator corrections are steep, it is a great time to wait for RSI divergence to appear.
  • The RSI divergence in correlation with trendlines & support/resistance areas is historically a very potent area to enter.

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.

Gold price (XAU-SEK)
18 389,28 SEK/oz
  
- 121,46 SEK
Silver price (XAG-SEK)
213,39 SEK/oz
  
- 0,83 SEK

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