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Gold has limited room to grow

Gold finished trading in Asia in the green thanks to a decline in the dollar index. At the beginning of the European session, growth slowed down due to the recovery in US Treasury yields.

 

The central event of the coming week will be the Fed meeting, the results of which will be announced on Wednesday. The regulator is expected to maintain the status quo and stick to a softer tone of statements. The key question that investors want an answer to is whether an improvement in the labor market situation and rising inflation can lead to a tightening of monetary policy in the coming years? An affirmative answer to this question could cause strong market volatility, as many investors will again bet on earlier withdrawal of incentives.

 

The negative impact on gold may be provided by news about the worsening epidemiological situation in India. On Sunday, the country registered a new record level of new COVID-19  cases. Investors fear that the further spread of the virus and new quarantine measures will lead to a significant decrease in physical demand for gold.

 

Other metals are held in the green trading zone on Monday. Silver is showing modest gains of + 0.1%. Platinum rose by 0.35%. Palladium is up by 0.65%.

 

In the economic calendar today, it is worth paying attention to the report on orders for durable goods in the United States for March.

 

Bearish signals prevail locally on the chart. After another unsuccessful attempt of buyers to gain a foothold above the level of 1795.00, we are waiting for a decline in quotations to the lower border of the range 1766.00-1795.00.

 

  • Resistance levels: 1795.00, 1810.00, 1825.00.

 

  • Support levels: 1766.00, 1747.00, 1722.00.

 

The main scenario is a decline to 1766.00.

 

An alternative scenario - growth to 1791.00.

 

The current fundamental background is neutral. We consider shorts from the level of 1787.00.

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