GOLD:1890 -1900 Area FIBO Area Resistance - Possible Reversal ?
Over the past four days, XAU/USD has been experiencing a notable surge and is currently up by around 1%. This rise in gold price can be attributed to the decreasing US Treasury yields, which are causing the market to be on high alert for any indication of a 50 basis points rate hike during the upcoming March FOMC Meeting.
Earlier in the Asian session, XAU/USD received a boost from the weaker US Dollar following the intervention of the Federal Reserve (Fed) and the US Treasury to rescue banks such as Silicon Valley Bank (SVB) and Signature Bank. However, the recent rise in borrowing costs throughout the US is putting a strain on financial health, resulting in the market facing the fallout from the SVB incident.
Due to its inverse correlation with US Treasury yields, Gold is highly sensitive to fluctuations in the yield curve's shorter end. The significant drop in yields that occurred last Friday, after the Nonfarm Payrolls (NFP) report, has been putting substantial downward pressure on the US Dollar and global equity markets.
In the coming days, the US economic calendar will feature the release of the Consumer Price Index (CPI) data on Tuesday. However, the market is already apprehensive ahead of the event, and the Fed's blackout period, which began recently, is further adding to the market's fragile dynamics. Therefore, it is likely that such sensitivity will continue until the March 22 FOMC Meeting.
Today the GOLD is approaching the 1890.000/1900 area where the Fibonacci levels of 50% and 61.8% in confluence with the resistance area may give a turning point for the price to come back in the bearish direction. This area will be crucial to understanding if the price will continue to grow or if a reversal will happen
Earlier in the Asian session, XAU/USD received a boost from the weaker US Dollar following the intervention of the Federal Reserve (Fed) and the US Treasury to rescue banks such as Silicon Valley Bank (SVB) and Signature Bank. However, the recent rise in borrowing costs throughout the US is putting a strain on financial health, resulting in the market facing the fallout from the SVB incident.
Due to its inverse correlation with US Treasury yields, Gold is highly sensitive to fluctuations in the yield curve's shorter end. The significant drop in yields that occurred last Friday, after the Nonfarm Payrolls (NFP) report, has been putting substantial downward pressure on the US Dollar and global equity markets.
In the coming days, the US economic calendar will feature the release of the Consumer Price Index (CPI) data on Tuesday. However, the market is already apprehensive ahead of the event, and the Fed's blackout period, which began recently, is further adding to the market's fragile dynamics. Therefore, it is likely that such sensitivity will continue until the March 22 FOMC Meeting.
Today the GOLD is approaching the 1890.000/1900 area where the Fibonacci levels of 50% and 61.8% in confluence with the resistance area may give a turning point for the price to come back in the bearish direction. This area will be crucial to understanding if the price will continue to grow or if a reversal will happen
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