Gold extends rebound after Friday’s dump
Gold is caught between a rock and a hard place, as it holds above the technically-important $2,900 level. On the one hand, the existing bullish momentum means traders are happy to continue buying every dip they can get their hands on – which looks to have again been the case after Friday’s dump. But on the other, speculation is running high, and many traders would welcome a correction to shake out froth, particularly if geopolitical risks start to ease. Trump’s stated ambition to resolve conflicts in Ukraine and Gaza could dent safe-haven demand should he succeed. His protectionist policies and aggressive spending plans may also fuel inflationary pressures, delaying rate cut expectations and supporting bond yields.
Given these considerations, traders are treading carefully. While the broader trend remains intact, the risk of a deeper pullback cannot be ignored at these elevated levels. For gold to reach the 3K without first staging a short-term correction, it may take an escalation in the geopolitical risks, particularly about Ukraine.
For now, though, the buyers have returned. Keep an eye on support around $2900-$2906 area which needs to hold for gold to maintain its short-term bullish bias.
Short-term resistance comes in around $2920-$2925, which was being tested at the time of writing. This area was the last support zone pre Friday’s breakdown, making it a key battleground.
By Fawad Razaqzada, market analyst with FOREX.com
Given these considerations, traders are treading carefully. While the broader trend remains intact, the risk of a deeper pullback cannot be ignored at these elevated levels. For gold to reach the 3K without first staging a short-term correction, it may take an escalation in the geopolitical risks, particularly about Ukraine.
For now, though, the buyers have returned. Keep an eye on support around $2900-$2906 area which needs to hold for gold to maintain its short-term bullish bias.
Short-term resistance comes in around $2920-$2925, which was being tested at the time of writing. This area was the last support zone pre Friday’s breakdown, making it a key battleground.
By Fawad Razaqzada, market analyst with FOREX.com
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.