The intensification of the Israel-Hamas conflict has forced investors to seek refuge in traditional safe-haven assets. Following this, the gold price rose to its highest level in three weeks. Meanwhile, markets received signals that the US Federal Reserve is nearing the end of its interest rate hike cycle. This provided additional support to the yellow metal.
Commerzbank: It’s too early for risk aversion to return
cryptokoin.comAs you follow from , the gold price made a strong rally on Friday, surpassing $1,900. Even though it gave back some of its gains on the first day of the week, it managed to maintain this critical level. Commerzbank economists say the market is belatedly aware of the war in the Middle East. In this context, economists make the following assessment:
It took a full week for the market to get into a risk-off mood. This was not a mastery of efficient information processing! Of course, the market has now finally figured this out: USD and especially CHF and more importantly gold managed to gain value towards the end of last week. In other words, classic safe harbours. Typically, such risk-off periods are fairly short-lived. But until the Israeli army’s ground offensive begins and it is still unclear how the Arab states will react, it is too early to return to risk.
ANZ: $1,950 is critical for the gold price!
Gold broke the $1,910 resistance level. According to ANZ Bank economists, buying could emerge at $1,900 and limit the downside. In this regard, economists draw attention to the following levels:
For gold to reverse the current downtrend, it must stay above $1,910 and break the next resistance level at $1,950. Breaking through $1,950 would also confirm the recent ‘double bottom’ formation, indicating a trend reversal. Since the recent price movement was triggered by the Israel-Hamas war, the geopolitical premium could quickly disappear if the situation normalizes. In this case, prices may fall below the $1,900 range. However, purchases may occur at this level and limit the downside.
Gold price technical analysis
market analyst Haresh Menghani evaluates the technical outlook of gold. B.Bulls are struggling to capitalize on momentum beyond the technically important 200-day Simple Moving Average (SMA). This situation leads to some profit taking in the gold price on the first day of the new week. Although the yellow metal continued its steady decline throughout the European session, it managed to stay above the $1,900 level due to the stagnation in US Dollar (USD) prices.
Any subsequent decline is more likely to find decent support near the $1,900 round figure. The support in question coincides with the 100-day SMA. Additionally, it is possible that it will act as an important pivot point now. A convincing break below could leave the gold price open to testing the next relevant support near the $1,868 horizontal zone before falling to the $1,860-1,855 zone.
On the other hand, bulls will likely wait for some buying beyond Friday’s high at $1,932-$1,933 before placing new bets. Gold price may then gain momentum towards the $1,945-$1,947 heavy supply zone. Any sustained strength beyond the latter would be a new trigger for the bulls. This will pave the way for further upward movements.
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