GOLD’s struggle with $3,400 extends amid Middle East escalation
Gold price closes in the bullish opening gap as sellers fight back control early Monday.
US Dollar strengthens on risk aversion due to the US involvement in the Israel-Iran conflict.
Gold price falls back to the critical 21-day SMA support at $3,351, with the bullish daily RSI.
Gold price has come under moderate selling pressure and reverts toward $3,350 early Monday, having faced rejection just shy of the $3,400 threshold.In doing so, Gold price filled in the bullish opening gap of about $25, led by the market’s reaction to the weekend news of the US military involvement in the Israel-Iran conflict.
Markets fret over the Israel-Iran conflict translating into a wider Middle East regional war if Iran opts to retaliate with the closure of the Strait of Hormuz, which is the key passage of oil exports.This nervousness has strengthened the haven demand for the USD, weighing on the USD-denominated Gold price.
Further, markets seem to believe that Iran may refrain from escalating the conflict by way of blocking the Strait of Hormuz even though its parliament has approved such a move.This narrative appears to have reinforced selling in Oil prices, rendering negative for the inflation-hedge Gold price. Markets believed the Middle East escalation-driven surge in Oil price could stoke inflationary fears worldwide.
Attention now turns to the preliminary readings of S&P Global PMI data, especially from the Euro area and the US to gauge the health of the economies globally.
Downbeat data could rekindle global growth concerns, reviving the safe-haven appeal of the Gold price.
Additionally, if Iran retaliates firmly to the US bombing by accelerating its attacks on Israel and US bases, buyers could swing back in action amid investors’ run for cover in the ultimate traditional haven Gold price.
Speeches from several US Fed policymakers will also be closely scrutinized after the Fed’s hawkish hold policy decision last week.
Daily technical analysis
Technically, Gold buyers remain hopeful so long as the 14-day RSI holds above the midline. The leading indicator is currently pointing south, near 52.
Gold price must defend the critical short-term support of the 21-day SMA at $3,350 on a daily or weekly closing basis to reinforce buying interest.
If that fails, the 50-day SMA at $3,318 will be put to test. The next downside cap is aligned at $3,297, the 38.2% Fibo level of the April record rally,
Alternatively, Gold price recovery will need a clear break of $3,377, the 23.6% Fibo level of the same ascent to revisit the $3,400 supply zone.
Further upside will challenge the static resistance at $3,440 will be tested.
Buyers will then take on the two-month highs of $3,453.
GOLD’s struggle with $3,400 extends amid Middle East escalation
Gold price has come under moderate selling pressure and reverts toward $3,350 early Monday, having faced rejection just shy of the $3,400 threshold.In doing so, Gold price filled in the bullish opening gap of about $25, led by the market’s reaction to the weekend news of the US military involvement in the Israel-Iran conflict.
Markets fret over the Israel-Iran conflict translating into a wider Middle East regional war if Iran opts to retaliate with the closure of the Strait of Hormuz, which is the key passage of oil exports.This nervousness has strengthened the haven demand for the USD, weighing on the USD-denominated Gold price.
Further, markets seem to believe that Iran may refrain from escalating the conflict by way of blocking the Strait of Hormuz even though its parliament has approved such a move.This narrative appears to have reinforced selling in Oil prices, rendering negative for the inflation-hedge Gold price. Markets believed the Middle East escalation-driven surge in Oil price could stoke inflationary fears worldwide.
Attention now turns to the preliminary readings of S&P Global PMI data, especially from the Euro area and the US to gauge the health of the economies globally.
Downbeat data could rekindle global growth concerns, reviving the safe-haven appeal of the Gold price.
Additionally, if Iran retaliates firmly to the US bombing by accelerating its attacks on Israel and US bases, buyers could swing back in action amid investors’ run for cover in the ultimate traditional haven Gold price.
Speeches from several US Fed policymakers will also be closely scrutinized after the Fed’s hawkish hold policy decision last week.
Daily technical analysis
Technically, Gold buyers remain hopeful so long as the 14-day RSI holds above the midline. The leading indicator is currently pointing south, near 52.
Gold price must defend the critical short-term support of the 21-day SMA at $3,350 on a daily or weekly closing basis to reinforce buying interest.
If that fails, the 50-day SMA at $3,318 will be put to test. The next downside cap is aligned at $3,297, the 38.2% Fibo level of the April record rally,
Alternatively, Gold price recovery will need a clear break of $3,377, the 23.6% Fibo level of the same ascent to revisit the $3,400 supply zone.
Further upside will challenge the static resistance at $3,440 will be tested.
Buyers will then take on the two-month highs of $3,453.
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