The Psychology of Gold: Fundamental and Technical Analysis

Cure oil prices started the week with a huge bullish gap and the barrel of West Texas Intermediate (WTI) touched its highest level since June above $75 as markets reacted to the closure of Strait of Hormuz following the US and Israel attacks on Iran. Although WTI retreats in the Euroepan morning, it holds comfortably above $71.

Gold benefits from intense risk-aversion on Monday and climbs toward $5,400, setting a fresh monthly-high in the process. Tensions in the Middle East remain high as Israel and Hezbollah continue to exchange strikes following the US-Israel joint attack on Iran over the weekend.

The EUR/USD pair claws back some of its early losses during the late Asian trading session on Monday, but is still 0.25% down to near 1.1780. Earlier in the day, the Euro declined sharply against the US Dollar as investors shifted to the safe-haven fleet amid the brutal war between Iran, Israel, and the United States, which broke out over the weekend.

Bitcoin, Ethereum, and Ripple prices trade on the back foot at the start of this week on Monday, after extending losses in the previous week. BTC is on the brink of a breakdown, ETH is capped below key resistance, and XRP risks a crack of the trendline.

As expected, this morning felt less like a Monday market open and more like a fire drill. Futures screens flickered red. S&P contracts down almost 1%. Nasdaq off 1.2%. Brent leaped 13% through $80. Gold rose 1.6% toward $5350 before paring some gains. The dollar is strutting mildly. The Swiss franc is quietly doing what it always does in a storm, catching some safe-haven flows.

We expect the February employment report to show that January’s robust pace of job growth overstated underlying momentum in the labor market. We look for nonfarm payrolls to rise 45K in February, moderating from its current three-month average pace of 73K (Figure 1).