GOLD ON THE EDGE- WILL SUPPORT HOLD OR WILL THE BEARS TAKE OVER?Symbol - XAUUSD
CMP - 2912
Gold is currently testing a key level, bouncing off previously tested trend support, which opens up a potential for upside movement. As global economic risks remain high, gold continues to be in demand as a safe haven. This demand is especially pronounced amid ongoing geopolitical tensions, including the upcoming US-Russia talks in Saudi Arabia, where a potential resolution of the Ukraine conflict could alter market sentiment. These talks could significantly impact the outlook for risk assets and the demand for safe-haven investments like gold.
Market participants are also cautious as the US Federal Reserve remains vigilant over inflation. Despite gold’s recent rally, weak risk appetite is boosting the dollar, and the hawkish tone from Fed officials continues to fuel concerns over inflation. They have voiced their preference for caution in cutting rates, especially with inflation still above target levels. This has led to expectations of a single rate cut this year, which in turn is influencing bond yields and investor sentiment. In terms of technical analysis, gold is trading within a critical risk zone.
Resistance Levels: 2915, 2928, 2942
Support Levels: 2897, 2880, 2855
A false break below the support level at 2897 could signal a continuation of bullish momentum, while maintaining price levels above 2920-2928 could open the path towards 2942, 2960, and potentially even 3000. Conversely, if gold fails to hold above the support levels and breaks below 2880, liquidation could occur, it could lead to a significant retracement and further downside risks.
