Today’s Gold Analysis Overview:
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The Overall Gold Trend: bearish.
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Today’s Gold Support Points: $4000 – $3965 – $3880 per ounce.
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Today’s Gold Resistance Points: $4140 – $4175 – $4230 per ounce.
Today’s Gold Trading Signals:
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Bullish Scenario: Buy gold from the support level of $3970 with a target of $4200 and a stop-loss at $3900.
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Bearish Scenario: Sell gold from the resistance level of $4220 with a target of $4100 and a stop-loss at $4280.
Note: These recommendations are suitable for medium-to-long-term traders, provided there is strict adherence to capital and risk management
Daily Technical Analysis of Gold/US Dollar (XAU/USD):
The decline in gold prices continued today with losses stretching to the support level of $4,050 per ounce, nearing its lowest performance in more than six months. According to performance across gold trading platforms, it is stabilizing around the level of $4,092 per ounce, awaiting an opportunity to break the crucial support barrier of $4,000 per ounce.
According to performance on the daily chart, this support is pushing technical indicators into deeply oversold levels. This is evident from the readings of the 14-day Relative Strength Index (RSI) and the MACD indicator. The movement of the Simple Moving Averages (SMAs) still supports the continued strength of the sellers’ control. Keeping in mind, breaking the psychological support barrier of $4,000 per ounce could bring stronger selling pressures in the coming period.
Conversely, over the same timeframe, the resistance levels of $4220 and $4300 could represent a potential turning point for buyers.
In general, despite global geopolitical tensions and notwithstanding Gold’s reputation as a safe haven, it has failed to provide any protection against the massive sell-off witnessed by the markets. Across the best trading platforms, gold prices have dropped by more than 22% since the start of the conflict in the Middle East at the end of February. Furthermore, rising expectations of a potential hike in US interest rates are also contributing to the decline in sentiment.
Why are Gold Prices Declining?
Among the prominent reasons for the recent decline in gold prices is the increasing wave of selling in global technology stocks. As shares of companies relying on artificial intelligence pull back from their record highs, investors facing losses in equity markets have increasingly resorted to selling gold to boost their cash liquidity and meet margin calls in their other investment portfolios.
Across stock trading platforms, the sharp decline in Wall Street markets, driven by the technology sector, accelerated the liquidation of bullion holdings, further increasing downward pressure on prices.
At the same time, expectations of tighter monetary policy in the United States strengthened the Dollar and reduced the attractiveness of non-yielding assets, such as Gold. In this regard, investors are increasingly betting that the Federal Reserve may be forced to raise US interest rates further to curb inflation.
Currently, market prices tracked by the Chicago Board of Trade’s FedWatch index indicate that traders now expect as many as three US interest rate hikes this year. These expectations have intensified after the Federal Reserve expressed growing concern about inflation, and its new chairman, Kevin Warsh, adopted a notably hawkish tone.
Trading Advice:
As long as trading continues below the resistance of $4,220 per ounce, bullish rebounds remain a potential opportunity to rebuild short positions. Meanwhile, monitoring price behavior near the psychological support of $4,000, which may determine Gold’s direction during the coming period.
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XAU/USD (Daily Chart)
