Gold outlook: Continues to trend higher on rising geopolitical tensions

Slobodan Drvenica Windsor Brokers

Gold

Gold extends steep rally and hit three-month high in early Friday, strongly supported by growing demand for safe haven on overheated situation in the Middle East, which threatens to escalate into possible broader regional crisis with unforeseeable consequences.

The yellow metal was up 4.5% last week and is on track for another strong advance this week (around 2.7% so far), with $50 increase seen in past two days.

Adding to support from geopolitics were the latest comments from Fed Chair Powell, who said that financial conditions were tightened by rise in bond yields which might be sufficient to keep the Fed on hold in its November policy meeting.

Fresh acceleration on Friday broke through important Fibo barrier at $1977 (61.8% of $2080/$1810 fall), generating fresh bullish signal, which will require confirmation on weekly close above this level and open way for attack at psychological $2000 barrier.

Technical studies are in full bullish configuration on daily chart but overbought, suggesting that bulls may take a breather in coming sessions.

Consolidation in current strongly favorable conditions for gold should be limited and offer better levels to re-enter strong bullish market, with dips to find solid support at $1950 zone.

Only significant decrease in geopolitical tensions, which so far looks very unlikely, would hurt bulls and push the price lower.

Res: 1987; 1997; 2000; 2010.
Sup: 1977; 1962; 1952; 1945.

Interested in XAU/USD technicals? Check out the key levels

1. R3 2018.92
2. R2 1998.34
3. R1 1986.41
PP 1965.83
1. S1 1953.9
2. S2 1933.32
3. S3 1921.39

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

EUR/USD faces next resistance near 1.1930

EUR/USD has surrendered its earlier intraday advance on Thursday and is now hovering uncomfortably around the 1.1860 region amid modest gains in the US Dolla. Moving forward, markets are exoected to closely follow Friday’s release of US CPI data.

GBP/USD inching closer to 1.36

The Pound Sterling edged higher to 1.3640 on Thursday, recovering from an earlier pullback after stronger-than-expected US jobs data initially weighed on the pair. The Bank of England held rates at 3.75% at its February 4 meeting in a narrow 5-4 vote split, with four members preferring a 25 basis point cut to 3.50%.

Gold falls to near $4,900 as selling pressure intensifies

Gold price faces some selling pressure around $4,910 during the early Asian session on Friday. The yellow metal tumbles over 3.50% on the day, with algorithmic traders appearing to amplify the precious metal’s sudden drop. Traders will closely monitor the release of the US Consumer Price Index inflation report for January, which will be released later on Friday.

Ethereum investors face huge unrealized losses following price slump

US spot Ethereum exchange-traded funds flipped negative again on Wednesday after recording net outflows of $129.1 million, reversing mild inflows seen at the beginning of the week, per SoSoValue data. Fidelity's FETH was responsible for more than half of withdrawals, posting outflows of $67 million.

A tale of two labour markets: Headline strength masks underlying weakness

Undoubtedly, yesterday’s delayed US January jobs report delivered a strong headline – one that surpassed most estimates. However, optimism quickly faded amid sobering benchmark revisions.

Aster Price Forecast: Demand sparks on Binance Wallet partnership for on-chain perpetuals

Aster is up roughly 9% so far on Thursday, hinting at the breakout of a crucial resistance level. Aster partners up with Binance wallet for the second season of the on-chain perpetuals challenge.