Gold prices experienced a sharp decline today, dropping to a three-and-a-half-week low. The move was driven by a combination of global macroeconomic concerns, investor behavior, and technical market dynamics.
🔍 Key Reasons Behind the Drop:
Global Trade Tensions Intensify
A major escalation in the U.S.-China trade war rattled markets. The U.S. announced new tariffs, and China retaliated with export restrictions on rare earth elements. This sparked broad risk-off sentiment across global markets.
Panic-Led Liquidation
Despite being a traditional safe haven, gold was sold off as investors rushed to cover losses in other risk assets. This often happens during periods of extreme volatility when liquidity becomes a priority.
Hawkish Fed Comments
Fed Chair Jerome Powell made comments suggesting the central bank might delay rate cuts due to persistent inflation and trade uncertainties. This caused the U.S. dollar to strengthen, which typically puts pressure on gold prices.
📈 Technical Analysis:
Current Price: Around $2,962
Support Levels:
First support around $2,950
Stronger support near $2,930
Resistance Levels:
Immediate resistance at $2,970 (Target 1 in your chart)
Further resistance near $3,000 (Target 2)
Trend & Indicators:
RSI is approaching oversold, indicating a potential bounce.
The short-term trend remains bearish, with a series of lower highs and lower lows.
Volume spiked during the sell-off, showing strong momentum behind the move.
🧠 What to Watch Going Forward:
Any new trade developments between major economies.
Fed’s stance on inflation and interest rates.
Gold’s behavior around key support zones – bounce or breakdown?
🔍 Key Reasons Behind the Drop:
Global Trade Tensions Intensify
A major escalation in the U.S.-China trade war rattled markets. The U.S. announced new tariffs, and China retaliated with export restrictions on rare earth elements. This sparked broad risk-off sentiment across global markets.
Panic-Led Liquidation
Despite being a traditional safe haven, gold was sold off as investors rushed to cover losses in other risk assets. This often happens during periods of extreme volatility when liquidity becomes a priority.
Hawkish Fed Comments
Fed Chair Jerome Powell made comments suggesting the central bank might delay rate cuts due to persistent inflation and trade uncertainties. This caused the U.S. dollar to strengthen, which typically puts pressure on gold prices.
📈 Technical Analysis:
Current Price: Around $2,962
Support Levels:
First support around $2,950
Stronger support near $2,930
Resistance Levels:
Immediate resistance at $2,970 (Target 1 in your chart)
Further resistance near $3,000 (Target 2)
Trend & Indicators:
RSI is approaching oversold, indicating a potential bounce.
The short-term trend remains bearish, with a series of lower highs and lower lows.
Volume spiked during the sell-off, showing strong momentum behind the move.
🧠 What to Watch Going Forward:
Any new trade developments between major economies.
Fed’s stance on inflation and interest rates.
Gold’s behavior around key support zones – bounce or breakdown?
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.