Gold Poise At All-Time High Levels

* U.S. equity markets pulled back from a previous AI rally ahead of the Fed’s testimony.

* Gold prices are approaching their all-time high levels, fueled by risk-off sentiment.

* BTC plunged more than 10% after it traded beyond its all-time high at $68980. 

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Fundamental Overview

U.S. equity markets are displaying signs of exhaustion after a two-week rally driven by artificial intelligence (AI) that propelled major indexes to record highs. The focus is now on Federal Reserve Chair Jerome Powell’s two-day testimony, commencing today, which holds the potential to significantly impact global financial markets as investors seek insights into the Fed’s forthcoming monetary policy decisions. Concurrently, gold prices have surged to all-time highs, driven by a prevailing risk-off sentiment. Meanwhile, Mitsubishi UFJ Financial Group, Japan’s largest bank, is strategically positioning itself in anticipation of a potential shift in the Bank of Japan’s (BoJ) monetary policy. Speculation centres around the BoJ potentially making its first rate hike in decades, a move that could influence the strength of the Japanese Yen against other currencies.

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Current rate hike bets on 20th March Fed interest rate decision: 

Source: CME Fedwatch Tool

0 bps (95%) VS -25 bps (5%) 

Economic Calendar

(MT4 System Time)

Source: MQL5 

Market Movements

DOLLAR_INDX, H4

The Dollar Index faced downward pressure, slipping below 103.85 in the last session. Investors seem to be swayed by recent lackluster economic data from the United States, indicating a potential slowdown in economic growth. This sentiment prevails despite expectations of relatively hawkish testimony from Federal Reserve Chair Jerome Powell scheduled for today and tomorrow. Powell’s testimony is anticipated to introduce higher volatility to the Dollar Index as market participants keenly await insights into the central bank’s stance amid economic challenges.

The dollar index traded eased from its short-term support level at 103.85, suggesting a shift in the index’s momentum. The Relative Strength Index (RSI) is gradually moving lower while the Moving Average Convergence Divergence (MACD) is flowing below the zero line, suggesting a bearish momentum is forming.

Resistance levels: 104.50, 104.95

Support levels: 103.70, 102.90

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XAU/USD, H4

Gold prices have extended their upward trajectory, surging by over 4% throughout March. The precious metal’s ascent is largely attributed to the prevailing risk-off sentiment in the market, intensifying ahead of Federal Reserve Chair Jerome Powell’s testimony scheduled for today and tomorrow. Additionally, the growing financial risk associated with a potential pullback in equity markets has further bolstered demand for gold as a safe-haven asset. Investors are closely monitoring Powell’s remarks for insights into the Fed’s stance amid heightened market uncertainty.

Gold prices have risen and are currently holding below their all-time high levels. The Relative Strength Index (RSI) continues to be in the overbought zone, while the Moving Average Convergence Divergence (MACD) continues to surge, suggesting the bullish momentum remains strong for gold.

Resistance levels: 2140.00, 2155.00

Support levels: 2117.90, 2088.20

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CL OIL, H4

Oil prices experienced a downturn, facing substantial pressure from the prevailing risk-off sentiment in the market, particularly in anticipation of Federal Reserve Chair Jerome Powell’s testimony scheduled for today. The heightened uncertainty has led to minimal volatility in oil prices as traders await the outcomes of the ongoing China People’s Congress meeting, recognizing the potential impact of China’s policies on oil prices.

Oil prices have declined to their support level of 78.65, which is a potential rebound level. The Relative Strength Index (RSI) has declined to near the 50 level while the Moving Average Convergence Divergence (MACD) has crossed from above and is approaching the zero line, suggesting a bearish momentum is forming.

Resistance levels: 81.20, 84.10

Support levels: 78.65, 75.20

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