Uncertainties Push Gold Gold Above $1,850, MAs Turn Into Support
Today it has been calm as markets digested last Friday’s strong NFP numbers, as well as the increased uncertainty in the Middle East following Hamas’s unexpected attack on Israel over the weekend. With tensions elevated, a number of problems are arising in the region, ranging from flight cancellations to gas production halts. As a result, the risk sentiment has turned negative and stock markets are trapped down, with S&P 500 futures down 0.6% and not much changed since the initial bearish gap at the opening, so most assets are trading water.
As we observe a more normal risk-off mentality in broader markets, the USD and the JPY are the two leading gainers in forex. However, the Swiss Franc and CAD are holding their own ground, with the latter aided by a rise in crude Oil prices due to the geopolitical tensions in the Middle East. US Oil is up more than 3% to around $86 but remains below today’s highs of $87.25.
Gold has also taken advantage of the uncertainty. XAU has been hitting lower highs since May and the downturn accelerated in late September, when it began tumbling lower, losing about $140. Although a support zone formed above $1,810, as Gold traded in a range, with the top at around $1,830.
XAU/USD saw an impressive intraday turnaround on Friday, rallying from $1,810, its lowest level since March 8. Meanwhile, the US Nonfarm Payrolls (NFP) data reiterated expectations for at least one more rate rise by the Federal Reserve (Fed), sending the USD higher and weighing on the precious metal initially. However, looking deeper into the report, it indicated that wage growth remained moderate, easing inflationary fears and potentially forcing the Fed to temper its hawkish position. This, in turn, pressured the US Dollar (USD) down for the third day, prompting aggressive short-covering in Gold, sending the price above $1,930 and allowing it to end a nine-day losing streak.
Over the weekend, tensions in the Middle East arose, which has turned risk sentiment off in financial markets and Gold is benefiting from all this. It opened with a bullish gap higher last night and has pushed above $1,850, with the 50 SMA (yellow) acting as support on the H4 chart. So, Gold is bullish for now, but we’re looking for a good zone to open a long-term sell Gold signal once the situation calms down.
Gold XAU Live Chart
ABOUT THE AUTHOR
See More
Sidebar rates
Related Posts
Save
Join 350 000+ traders receiving Free Trading Signals
Alerts
Rates
Calendar
Signals