Volatility in Gold, After Mixed News on All Fronts Today
Gold forming a bullish reversing pattern at MAs after the reversal lower
The risk sentiment today is flipping on both sides, with geopolitical news from the Middle East, showing an escalation of the situation over the weekend, but now we are hearing that the parties might be heading toward negotiations, which is positive for risk sentiment. As a result, we saw a huge spike in Gold earlier, sending XAU $15 higher, only to reverse back down in the next hour.
Markets were mostly trading in a tight range during the European session, with news headlines being very light. Crude Oil and Gold were among the first to rise when the market opened in the Asian session, with XAU/USD putting up a $5 bullish gap, as Middle Eastern tensions rose again over the weekend, which still needs to be closed after the reversal lower. However, WTI Oil has closed the starting gap higher and is currently trading down for the day. Crude Oil is trading below the $77 level after buyers couldn’t push the price above its 100-day moving average of $79.39.
Forex has been pretty quiet, although the USD was more sluggish as lower Treasury yields were weighing on the Buck. However, while crude Oil made a strong reversal right after it opened, GOLD continued to remain bullish and surged higher above $2,037 just a while ago, gaining around $20 today, including the bullish gap.
Hope for A Solution Helping Risk Sentiment
But, the reversal was pretty swift after news that players in the Middle East are planning to meet for negotiations, which would be welcomed by all sides, especially by risk assets. Negotiators from the United States, Israel, Egypt and Qatar have reached an agreement on a framework for the release of the remaining American and Israeli captives, which was probably the reason for Gold to make the flash bearish reversal. Meanwhile, USD Defense Secretary Austin was speaking earlier:
- Expresses grief and indignation over the loss of US servicemen in Jordan drone assault
- Neither he nor Biden will allow attacks on US soldiers, and they will take all necessary measures to defend them.
Gold XAU Live Chart
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