👀 Ones to watch: The MOST undervalued shares to buy right nowSee Undervalued Shares

Gold Bulls Still Insecure Despite Monday’s Monster Move

Published 14/03/2023, 10:31 am
XAU/USD
-
GC
-

The movements in gold futures since the gap-up start of this week indicate that this rally is likely to continue. Investors' belief that the banking sector's turmoil may cause the Fed to reconsider its rate hike strategy has led to skepticism among gold bugs. The odds of pausing hikes by the Fed in its meeting next week have jumped to 47%, according to Investing.com's Fed Rate Monitor Tool.

Gold Futures Daily Chart

Technically speaking, in a daily chart, gold futures found significant support at $1815 before bouncing back amid growing uncertainty over the Fed's interest rate hike to control inflation. Recent economic data has been evident enough to change the rate hike pace, but uncertainty still looms as gold prices have immediate resistance at $1919 and the next significant resistance at $1937.

On a positive note, a bullish crossover formation in a daily chart by the 9 DMA above the 18 DMA indicates that the rally will continue. However, selling could resume if the futures do not hold above the immediate resistance at $1919 on Tuesday.

Gold could continue to wobble until the Fed's next meeting, trading within a range of $1877 to $1957, as US stock markets are likely to remain volatile. Despite SVB's rescue, investors are considering a significant decline in Treasury yields as they speculate about a less aggressive Federal Reserve and ongoing upheaval in the banking industry.

In conclusion, while the prices could see some exhaustion from the current levels, the overall trend could remain bullish if they find a breakout above $1937. On the other hand, if they do not hold significant support at $1902, bears could become active before this weekly closing.

Disclaimer: The author of this analysis may or may not have any position in the Gold futures. Readers can take any long or short trading position at their own risk. Risk in trading must be taken care of before creating any trading call.

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.