These Could Be For Gold Prices During The Week!

According to market analyst Anil Panchal, gold prices are firm in a risky environment as Asian stock markets slide on Monday. Additionally, a Russian attack on Ukraine poses an increased risk, according to weekend headlines. Market commentary by ANZ analysts and technical analysis by Anil Panchal cryptocoin.com We have prepared for our readers.

“Markets may stabilize if the Fed isn’t as hawkish as expected”

Gold prices start the Fed week on a slightly positive note, around $1,834, after a two-week uptrend in the first Asian session on Monday. However, the market’s cautious mood ahead of the critical Federal Open Market Committee (FOMC) this week has combined lower US Treasury yields and US Dollar Index (DXY) performance in recent days to support safe-haven demand for the yellow metal, according to the analyst. The analyst states that in addition to Fed-related fears, geopolitical concerns over the Ukraine-Russia war, along with inflation woes, are driving market players to the traditional safe haven.

Even though last week’s US data was mostly mixed, the latest Fedspeak hawk shows that the US central bank is on track to plan a March rate hike on Wednesday. Talks about Omicron-linked supply chain damage and inflation issues are adding support to the bullish trend, according to the analyst. The analyst states that the comments of the US President Joe Biden and the Managing Director of the International Monetary Fund, Kristalina Georgieva, support the hawkish bias of the Fed, which strengthens the Fed’s interest rate hike concerns. ANZ analysts make the following assessment:

Markets are trading cautiously ahead of this week’s FOMC announcement, which is expected to falter and potentially outline interest rate hikes that began in March. We doubt the Fed will end QE next week, as some in the market have speculated. We also doubt that the Fed will begin policy tightening with a 50 basis point rate hike. Markets could stabilize if the Fed isn’t as hawkish as some worst-case fears suggest.

However, analysts say that reports of Russia’s preparations to invade Ukraine have also increased recently, which has increased demand for gold. Against this backdrop, US 10-year Treasuries rose 1.8 basis points (bps) to 1,767 after posting the first weekly drop in five weeks, while S&P 500 Futures rose 0.30%, rebounding from the previous week in a mostly quiet session. ..

Gold prices technical analysis

Market analyst Anil Panchal points out the following technical levels for gold prices:

Returning from the one-year resistance line, gold prices await further losses towards the 50 and 100-SMA levels around $1,825 and $1,816, respectively, and are currently pulling down the 61.8% Fibonacci retracement (Fibo.) of the November-December period. However, further downside for the precious metal will be challenged by an ascending support line near $1,812 from mid-December 2021 and a break of this line will confirm the bullish wedge bearish chart formation.

If the bears hold the reins above $1,812, the theory suggests a gradual southward drop to around $1,721 towards September 2021. Still, the monthly low and December 2021 lows around $1,780 and $1,755 will offer intermediate stops at this time.

Gold prices
Gold prices four hour chart

Alternatively, recovery moves will initially aim to challenge the ascending wedge formation with an upside break of the formation’s resistance line near $1,842. Following this, the aforementioned annual resistance line around $1,848 will regain the market’s attention and breaking it will be an open invitation for the bulls to target $1,900 and above in the coming days.

To sum up, gold buyers have pulled back from the key resistance line but this is not giving a warm welcome to the sellers until the price drops below $1,812.

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