GOLD BULLS TAKE A BREAK AS MARKETS CALM DOWN

Gold price is trading right above $1,970 at the time of the writing, as the bright metal extends the retracement triggered after topping at the $2,000 round resistance in the latter stages of last week. XAU/USD bulls still are in the driver’s seat, as Gold keeps making higher highs and higher lows.

Gold uptrend slows down as market mood improves

After a couple of turbulent and hectic weeks of trading, the start of the last week of March seems a bit quieter. Banking fears have receded somewhat, as the Federal Deposit Insurance Corp (FDIC) announced over the weekend that First Citizens BancShares Inc bought all the loans and deposits from the bankrupt Silicon Valley Bank. Monday trading has started with a positive market mood, and capital inflows to safe-haven assets like Gold have calmed down.

This week's highlights in the economic calendar await on Friday, with Chinese PMIs and US Personal Consumption Expenditures (PCE) Price Index data being the two heaviest hitters. Gold price traders should closely monitor both releases. China is the biggest Gold market in the world and any developments in their economy are huge for precious metals demand. On the United States front, inflation figures remain at the top of the Federal Reserve officials’ minds, and US PCE numbers are their preferred inflation indicators. 

Eren Sengezer, Senior Analyst at FXStreet, explains that Federal Open Market Committee (FOMC) member speeches should also be tracked by Gold traders, as the blackout period ended after last week’s meeting and any insights from the future monetary policy intentions of the Fed is huge to shape the expectations of the market:

Investors will pay close attention to comments from Fed officials now that the blackout period is over. Furthermore, Friday’s panic mode in markets showed that investors remain on the lookout for signs of stress in the banking sector. Hence, Gold price could benefit from another slide in global yields.