Today’s analysis offers a comprehensive overview of the gold market, highlighting the key fundamental and technical factors influencing current trends. This report is designed to equip investors with the insights necessary to navigate the market confidently and effectively.
Gold prices rose for the third consecutive session on Monday, once again approaching the key $3,400 per troy ounce resistance level. The move comes amid renewed demand for the US Dollar, while mixed signals from US Treasury yields across different maturities are helping to sustain support for the precious metal. Geopolitical tensions also added to gold’s safe-haven appeal, after former U.S. President Donald Trump ordered the deployment of two nuclear submarines near Russia in response to provocative remarks from former Russian President Dmitry Medvedev. Medvedev warned that each new ultimatum from Trump could be viewed as a direct threat and a step toward war. The potential for escalating conflict in the ongoing Russia-Ukraine war could further bolster gold demand and help cushion downside pressure.
Last week’s breakout above the $3,330 horizontal resistance, followed by a sustained move beyond the 100-period Moving Average on the 4-hour chart, reinforces the bullish outlook for XAU/USD. Additionally, momentum indicators on the same chart continue to gain positive traction, supporting the potential for dip-buying interest in the near term. As such, adopting a buy-on-dips strategy appears prudent. The short-term Stochastics Oscillator stands at 59, while the Relative Strength Index (RSI) is at 53, both reflecting moderate bullish momentum.
Stochastics Oscillator: Measures momentum by comparing the closing price to its recent trading range. Readings above 80 indicate overbought conditions, while readings below 20 suggest oversold levels.
Relative Strength Index (RSI): Evaluates the speed and magnitude of price movements. A value above 70 signals overbought conditions, while below 30 indicates the asset may be oversold.
In the dynamic and constantly evolving bullion market, staying informed through both technical and fundamental analysis is essential for making sound investment decisions. This report aims to deliver a balanced perspective to help investors navigate the complexities of gold trading with clarity and confidence.