Gold Bulls Still Insecure Despite Monday’s Monster Move
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The movements in gold futures since the gap-up start of this week indicate that this rally is likely to continue. Investors’ belief that the banking sector’s turmoil may cause the Fed to reconsider its rate hike strategy has led to skepticism among gold bugs. The odds of pausing hikes by the Fed in its meeting next week have jumped to 47%, according to Investing.com’s Fed Rate Monitor Tool.
Gold Futures Daily Chart
Technically speaking, in a daily chart, gold futures found significant support at $1815 before bouncing back amid growing uncertainty over the Fed’s interest rate hike to control inflation. Recent economic data has been evident enough to change the rate hike pace, but uncertainty still looms as gold prices have immediate resistance at $1919 and the next significant resistance at $1937.
On a positive note, a bullish crossover formation in a daily chart by the 9 DMA above the 18 DMA indicates that the rally will continue. However, selling could resume if the futures do not hold above the immediate resistance at $1919 on Tuesday.
Gold could continue to wobble until the Fed’s next meeting, trading within a range of $1877 to $1957, as US stock markets are likely to remain volatile. Despite SVB’s rescue, investors are considering a significant decline in Treasury yields as they speculate about a less aggressive Federal Reserve and ongoing upheaval in the banking industry.
In conclusion, while the prices could see some exhaustion from the current levels, the overall trend could remain bullish if they find a breakout above $1937. On the other hand, if they do not hold significant support at $1902, bears could become active before this weekly closing.
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