GOLD defends 21-day SMA amid renewed geopolitical, trade tensions
Gold battles $4,100, reversing the Asian dip to near $4,065 on Thursday.
US Dollar finds fresh haven bids as geopolitics and trade headlines dent risk appetite.
Gold buyers stay hopeful whilst above the 21-day SMA at $4,024, with daily RSI still bullish.
Gold has reversed the early Asian dip to near $4,065 on Thursday, battling the $4,100 mark as traders look for fresh developments on the geopolitical and trade front.
Risk-off flows extended into early Thursday as markets reacted negatively to reports of fresh US threats on Chinese products.
Reuters reported that the US is considering a plan to restrict an array of software-powered exports to China, from laptops to jet engines, to retaliate against Beijing’s latest round of rare earth export restrictions.
Meanwhile, renewed geopolitical headlines also hogged the limelight after US President Donald Trump imposed sanctions on Russia’s major oil companies and accused the Russians of a lack of commitment toward ending the war in Ukraine.
Markets also weighed the disappointing earnings reports from US tech giants. Tesla reported below forecast profits, while Netflix tumbled on grim outlook.
These factors overshadow any optimism over a likely US-China trade deal next week, as hinted by US President Donald Trump.
Broad risk aversion helps the USD regain its safe-haven status, limiting Gold’s recovery momentum. The recent decline in the GBP Sterling and the JPY also keeps the sentiment around the Greenback underpinned.
Looking ahead, it remains to be seen if Gold can sustain its recovery, despite the USD’s dominance. This depends on the incoming geopolitical and trade updates in the absence of the US economic data releases.
All eyes turn to Friday’s US CPI data, but an interest rate cut by the Federal Reserve next week is fully priced in. However, traders could continue taking profits on their Gold longs in the lead-up to the US CPI event risk.
Daily technical analysis
Gold continues to defend the 21-day SMA, now at $4,024.Meanwhile, the 14-day RSI looks to turn around, currently near 57.The leading indicator suggests that Gold buyers could likely regain control in the near term.
However, they must recapture the 23.6% Fibonacci Retracement (August 19 low to October 20 high) support-turned-resistance at $4,129 to revive the record-setting rally.
The next topside hurdle is seen at the $4,300 round level, followed by the all-time highs of $4,382.
On the flip side, if the 21-day SMA is breached on a daily candlestick closing basis, the 38.2% Fibo level at $3,972 could lend immediate support.
A steeper correction could unfold on a failure to resist above the latter, opening doors toward the 50% Fibo level at $3,847.
GOLD defends 21-day SMA amid renewed geopolitical, trade tensions
Gold has reversed the early Asian dip to near $4,065 on Thursday, battling the $4,100 mark as traders look for fresh developments on the geopolitical and trade front.
Risk-off flows extended into early Thursday as markets reacted negatively to reports of fresh US threats on Chinese products.
Reuters reported that the US is considering a plan to restrict an array of software-powered exports to China, from laptops to jet engines, to retaliate against Beijing’s latest round of rare earth export restrictions.
Meanwhile, renewed geopolitical headlines also hogged the limelight after US President Donald Trump imposed sanctions on Russia’s major oil companies and accused the Russians of a lack of commitment toward ending the war in Ukraine.
Markets also weighed the disappointing earnings reports from US tech giants. Tesla reported below forecast profits, while Netflix tumbled on grim outlook.
These factors overshadow any optimism over a likely US-China trade deal next week, as hinted by US President Donald Trump.
Broad risk aversion helps the USD regain its safe-haven status, limiting Gold’s recovery momentum. The recent decline in the GBP Sterling and the JPY also keeps the sentiment around the Greenback underpinned.
Looking ahead, it remains to be seen if Gold can sustain its recovery, despite the USD’s dominance. This depends on the incoming geopolitical and trade updates in the absence of the US economic data releases.
All eyes turn to Friday’s US CPI data, but an interest rate cut by the Federal Reserve next week is fully priced in. However, traders could continue taking profits on their Gold longs in the lead-up to the US CPI event risk.
Daily technical analysis
Gold continues to defend the 21-day SMA, now at $4,024.Meanwhile, the 14-day RSI looks to turn around, currently near 57.The leading indicator suggests that Gold buyers could likely regain control in the near term.
However, they must recapture the 23.6% Fibonacci Retracement (August 19 low to October 20 high) support-turned-resistance at $4,129 to revive the record-setting rally.
The next topside hurdle is seen at the $4,300 round level, followed by the all-time highs of $4,382.
On the flip side, if the 21-day SMA is breached on a daily candlestick closing basis, the 38.2% Fibo level at $3,972 could lend immediate support.
A steeper correction could unfold on a failure to resist above the latter, opening doors toward the 50% Fibo level at $3,847.
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