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Gold Price Meets the 100 SMA After Falling 2.5%. Will It Reverse Up?

The Gold price experienced a sharp decline today, falling by 2.50% so far, with the price slipping to $2,328, but it has met the 100 daily SMA now. This decline has come as geopolitical tensions ease which has led to an improvement in risk sentiment in financial markets. As geopolitical concerns eased, investors may have shifted away from safe-haven assets like gold towards riskier assets, leading to a decline in Gold prices.

Gold's uptrend under threat as bond buyers return

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Bond yields have also gone up today despite the bullish move in stock markets, with the 10-year US bond rates having risen to 4.63%. This increase in yields for interest-bearing assets is driven by expectations that the Federal Reserve will be less inclined to cut interest rates compared to other central banks in developed countries. As bond yields rise, non-yielding assets such as GOLD become less attractive to investors.

Gold Chart H4 – Can the 100 SMA Hold As Support?

Consequently, the price of gold (XAU/USD) experienced a significant decline after failing to recapture the key resistance level of $2,400 during today’s morning trade. This decline in gold prices is attributed to reduced safe-haven demand as tensions in the Middle East eased, with SILVER XAG also down by around 5%. With no further escalation in hostilities between Iran and Israel, the market sentiment improved and safe havens are losing some of the shine today.

At the moment the price of Gold trades at $2327, reflecting a decrease of 1.55% for the day, which is a terrible opening of the week. The decline intensified after breaking below the pivot point range of $2,350-2360, pushing gold toward support levels at $2,325, $2,300, and $2,270. As the downward momentum persists, these support levels may serve as targets for further downside movement in Gold prices. However, Gold sellers will have to break below the 100 SMA (green) first, which might turn into support and reverse the price higher, as other moving averages have done in the previous weeks.

Gold Live Chart 

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Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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