Gold is up roughly 1% in Friday’s Asian hours, reversing the previous decline to near the $5,050 region. Buyers refuse to give up yet, as Gold continues to find a floor ahead of the US GDP revision and PCE Price Index release.
Despite the latest recovery attempt, Gold remains on track to book the second weekly loss as a hawkish shift in the US Fed monetary policy outlook counters the safe-haven appeal fuelled by the widening war in the Middle East.
With no end in sight for the Iran war, the recent Oil price surge continues to boost inflation expectations and raise economic growth concerns, underpinning the safe-haven demand for the USD the so-called world’s reserve currency.
Iran attacked several tankers and vessels in the Gulf waters while controlling the passage of commercial traffic through the Straight of Hormuz, the vital waterway for 20% of global oil supplies.Iran’s new supreme leader, Mojtaba Khamenei, said in his first public statement since being appointed that the closure of the Strait of Hormuz maritime passage should be continued as a “tool to pressure the enemy,” CNBC reported on Thursday.
The Greenback also capitalizes on its re-emergent role as a petrocurrency. Meanwhile, higher inflation expectations prompt markets to potentially price out a Fed interest rate cut this year, further supporting the buck while weighing negatively on the yellow metal.
Later in the day, the Iran war headlines will continue to play a pivotal role in the Gold price action as markets take account of the 8% rise in Oil prices so far this week.
Gold could also be driven by the end-of-the-week flows and the repositioning trades ahead of next week’s Fed policy meeting.
Meanwhile, traders could ignore the US data flow as the GDP data is a revision and the PCE inflation data is for January, which will likely have little relevance for the Fed.
Daily technical analysis
The near-term bias is mildly bullish as price holds above the rising 21-day and 50-day SMAs, while the 100- and 200-day SMAs also trend higher, reinforcing a broader uptrend backdrop. The latest RSI reading near 52 stays above the midline and points to steady, rather than stretched, upside momentum.
Price has also pushed back above the 61.8% Fibonacci retracement at $5,141.05 measured from the $5,597.89 high to the $4,401.99 low, suggesting the recent pullback is stabilizing within a larger bullish structure.
Initial resistance is aligned with the 61.8% retracement at $5,141.05, and a sustained break higher would expose the psychological $5,200 area ahead of the $5,341.96 level at the 78.6% retracement. On the downside, immediate support emerges at the 21-day SMA around $5,120, followed by the 50-day SMA near $4,946, which protects the Fibonacci 50.0% retracement at $4,999.94. A deeper slide would then target the 38.2% retracement at $4,858.82, where failure would weaken the bullish bias and open the way toward the $4,684.22 level at the 23.6% retracement.
GOLD buyers refuse to give up yet as Middle East war widens
Gold is up roughly 1% in Friday’s Asian hours, reversing the previous decline to near the $5,050 region. Buyers refuse to give up yet, as Gold continues to find a floor ahead of the US GDP revision and PCE Price Index release.
Despite the latest recovery attempt, Gold remains on track to book the second weekly loss as a hawkish shift in the US Fed monetary policy outlook counters the safe-haven appeal fuelled by the widening war in the Middle East.
With no end in sight for the Iran war, the recent Oil price surge continues to boost inflation expectations and raise economic growth concerns, underpinning the safe-haven demand for the USD the so-called world’s reserve currency.
Iran attacked several tankers and vessels in the Gulf waters while controlling the passage of commercial traffic through the Straight of Hormuz, the vital waterway for 20% of global oil supplies.Iran’s new supreme leader, Mojtaba Khamenei, said in his first public statement since being appointed that the closure of the Strait of Hormuz maritime passage should be continued as a “tool to pressure the enemy,” CNBC reported on Thursday.
The Greenback also capitalizes on its re-emergent role as a petrocurrency. Meanwhile, higher inflation expectations prompt markets to potentially price out a Fed interest rate cut this year, further supporting the buck while weighing negatively on the yellow metal.
Later in the day, the Iran war headlines will continue to play a pivotal role in the Gold price action as markets take account of the 8% rise in Oil prices so far this week.
Gold could also be driven by the end-of-the-week flows and the repositioning trades ahead of next week’s Fed policy meeting.
Meanwhile, traders could ignore the US data flow as the GDP data is a revision and the PCE inflation data is for January, which will likely have little relevance for the Fed.
Daily technical analysis
The near-term bias is mildly bullish as price holds above the rising 21-day and 50-day SMAs, while the 100- and 200-day SMAs also trend higher, reinforcing a broader uptrend backdrop. The latest RSI reading near 52 stays above the midline and points to steady, rather than stretched, upside momentum.
Price has also pushed back above the 61.8% Fibonacci retracement at $5,141.05 measured from the $5,597.89 high to the $4,401.99 low, suggesting the recent pullback is stabilizing within a larger bullish structure.
Initial resistance is aligned with the 61.8% retracement at $5,141.05, and a sustained break higher would expose the psychological $5,200 area ahead of the $5,341.96 level at the 78.6% retracement. On the downside, immediate support emerges at the 21-day SMA around $5,120, followed by the 50-day SMA near $4,946, which protects the Fibonacci 50.0% retracement at $4,999.94. A deeper slide would then target the 38.2% retracement at $4,858.82, where failure would weaken the bullish bias and open the way toward the $4,684.22 level at the 23.6% retracement.
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