Gold Price Forecast: Is it possible a run to $2,000 after the sharp pullback?
XAU/USD Current price: $1,925.12
- Demand for the greenback triggered a nice pullback in XAU/USD.
- Russia launched a military attack on Ukraine, triggering a global run for safety.
- XAU/USD trimmed most of its intraday gains but has room to recover.
Spot gold topped at $1,974.40 a troy ounce a level that was last seen in September 2020 but retreated sharply from the level and currently trades at around $1,925 a troy ounce. Market players gave up on the bright metal, particularly after Wall Street’s opening and despite the panic run into safety continues. The Dollar Index soared to fresh 2022 highs, being partially responsible for XAU/USD slump.
US stocks plunged at the opening, with the Dow Jones Industrial Average starting the day over 800 points lower amid Russia's decision of unwinding war. The country launched a military attack on Ukraine at the beginning of the day and has continued with it despite Western nations announcing sanctions and condemning Moscow's actions. The latest on the crisis came from Ukrainian President Volodymyr Zelenskyy who reported that Russian forces entered Chernobyl to seize the nuclear plant.
"Advisor to Ukrainian interior ministry says Russian forces entered Chernobyl and that fighting there destroyed a nuclear waste storage facility," NBC's Richard Engel tweeted.
Gold price short-term technical outlook
The XAU/USD pair is roughly $55 down from its intraday low but maintains modest intraday gains. The daily chart shows that technical indicators keep heading north, despite being in overbought territory, as the metal trades above all of its moving averages. Among those, the 20 SMA picked up above the longer ones, reflecting increased buying interest.
The 4-hour chart shows that technical indicators have corrected extreme overbought readings, but also that they lost their bearish strength within positive levels. Even further, the metal has bounced from around a bullish 20 SMA, which currently stands at around 1,912. As long as the 1,900 level holds, the metal has room to resume its advance and reach fresh highs near the $2,000 threshold.
Support levels: 1.912.00 1,903.80 1,887.60
Resistance levels: 1,940.65 1,953.80 1,974.40
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Author
Valeria Bednarik
FXStreet
Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.
