GOLD tracks relief rally in global markets, eyes on Iran war
Gold builds on the previous rebound from near $5,000 early Tuesday as risk sentiment recovers.
The US Dollar consolidates the overnight drop, led by Trump’s comments that the Iran war could be ‘over soon’.
Technically, Gold needs a daily closing above 61.8% Fibo level at $5,141 for a sustained move higher.
Gold is finding fresh demand, building on its previous rebound in another attempt to regain the $5,200 barrier on Tuesday.
Gold buyers are back in charge, capitalizing on a relief rally seen across the financial markets as the Oil price upsurge fizzles and traders anticipate that the end of the Middle War could be near.
The optimism triggered a risk-on wave across the board after US President Donald Trump told CBS News on Monday that “I think the war is very complete, pretty much. They have no navy, no communications, they’ve got no Air Force.”
Early Tuesday, the WSJ reported that Trump’s “advisers privately urged him to look for an exit plan amid spiking oil prices and concerns that a lengthy conflict could spark political backlash,” prompting the President to publicly announce that the military campaign in Iran could end soon.
Further, Trump’s comments and fresh reports suggesting Washington may soften sanctions on Russian energy, also added to the market relief as Oil price turned sharply lower on the day, following the 25% spike to three-year highs.
The recovery in risk sentiment triggered a big sell-off in the US Dollar as markets ditched the safe haven and the global currency reserve in favor of Wall Street stocks.
However, any downside in Oil prices is likely to remain limited as some of the Gulf countries have scaled back their oil production amid the closure of the Strait of Hormuz, keeping concerns over supply disruption alive.
Additionally, Iran’s Islamic Revolutionary Guard Corps’s (IRGC) response to Trump’s conciliatory remarks leaves investors on edge and Oil prices supported. IRGC said that Tehran will determine when the war ends, not the US, adding that “Tehran would not allow export of one litre of oil from region if US, Israeli attacks continue.”
If Oil prices resume their upside, the USD could once again attract haven bids, boding ill for the USD-denominated Gold. Also, surging oil prices stoke inflation fears and fade expectations surrounding US Fed interest rate cuts, serving as negative for the non-yielding bullion.
That being said, traders also remain wary ahead of the US February CPI data due for release on Wednesday. The inflation data could provide fresh hints on the Fed’s policy path, significantly impacting the Greenback, which could move Gold.
In the meantime, all eyes remain on the headlines from the Middle East war.
Daily technical analysis
The near-term bias is cautiously bullish as price holds above the 21-, 50-, 100- and 200-day SMA, with the shorter averages clustered well above the longer ones, reinforcing an established uptrend. The metal has bounced from the 38.2% Fibonacci retracement at $4,858.82 measured from the $4,401.99 low to the $5,597.89 high, underscoring the significance of that pullback floor. The RSI hovers just above 50, showing moderated momentum after prior overbought readings, yet still aligned with a gentle upside bias while the recent series of higher closes remains intact.
Initial resistance emerges at the 61.8% retracement near $5,141.05, where a daily close above would open the way toward the 78.6% level at $5,341.96, and beyond that the record high zone around $5,598. On the downside, immediate support is seen at the 50% retracement at $4,999.94, which converges with the rising 21-day SMA to create a nearby demand area; a break below would expose the 38.2% level at $4,858.82. Further weakness from there would bring the rising 50-day SMA around the $4,880 area into focus as the next key trend support, with the 100-day SMA much lower, reinforcing the broader bullish structure even in the event of a deeper correction.
GOLD tracks relief rally in global markets, eyes on Iran war
Gold is finding fresh demand, building on its previous rebound in another attempt to regain the $5,200 barrier on Tuesday.
Gold buyers are back in charge, capitalizing on a relief rally seen across the financial markets as the Oil price upsurge fizzles and traders anticipate that the end of the Middle War could be near.
The optimism triggered a risk-on wave across the board after US President Donald Trump told CBS News on Monday that “I think the war is very complete, pretty much. They have no navy, no communications, they’ve got no Air Force.”
Early Tuesday, the WSJ reported that Trump’s “advisers privately urged him to look for an exit plan amid spiking oil prices and concerns that a lengthy conflict could spark political backlash,” prompting the President to publicly announce that the military campaign in Iran could end soon.
Further, Trump’s comments and fresh reports suggesting Washington may soften sanctions on Russian energy, also added to the market relief as Oil price turned sharply lower on the day, following the 25% spike to three-year highs.
The recovery in risk sentiment triggered a big sell-off in the US Dollar as markets ditched the safe haven and the global currency reserve in favor of Wall Street stocks.
However, any downside in Oil prices is likely to remain limited as some of the Gulf countries have scaled back their oil production amid the closure of the Strait of Hormuz, keeping concerns over supply disruption alive.
Additionally, Iran’s Islamic Revolutionary Guard Corps’s (IRGC) response to Trump’s conciliatory remarks leaves investors on edge and Oil prices supported. IRGC said that Tehran will determine when the war ends, not the US, adding that “Tehran would not allow export of one litre of oil from region if US, Israeli attacks continue.”
If Oil prices resume their upside, the USD could once again attract haven bids, boding ill for the USD-denominated Gold. Also, surging oil prices stoke inflation fears and fade expectations surrounding US Fed interest rate cuts, serving as negative for the non-yielding bullion.
That being said, traders also remain wary ahead of the US February CPI data due for release on Wednesday. The inflation data could provide fresh hints on the Fed’s policy path, significantly impacting the Greenback, which could move Gold.
In the meantime, all eyes remain on the headlines from the Middle East war.
Daily technical analysis
The near-term bias is cautiously bullish as price holds above the 21-, 50-, 100- and 200-day SMA, with the shorter averages clustered well above the longer ones, reinforcing an established uptrend. The metal has bounced from the 38.2% Fibonacci retracement at $4,858.82 measured from the $4,401.99 low to the $5,597.89 high, underscoring the significance of that pullback floor. The RSI hovers just above 50, showing moderated momentum after prior overbought readings, yet still aligned with a gentle upside bias while the recent series of higher closes remains intact.
Initial resistance emerges at the 61.8% retracement near $5,141.05, where a daily close above would open the way toward the 78.6% level at $5,341.96, and beyond that the record high zone around $5,598. On the downside, immediate support is seen at the 50% retracement at $4,999.94, which converges with the rising 21-day SMA to create a nearby demand area; a break below would expose the 38.2% level at $4,858.82. Further weakness from there would bring the rising 50-day SMA around the $4,880 area into focus as the next key trend support, with the 100-day SMA much lower, reinforcing the broader bullish structure even in the event of a deeper correction.
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