Gold hit fresh multi-month highs at $1914 on Tuesday and, though pulling back from these highs printed during Asia pacific trade as dip-buying facilitating an intra-day rebound in global equities markets, has remained above the key $1900 level.

Gold struggled to capitalize on its early modest gains to the highest level since early June 2021 and witnessed an intraday turnaround from the $1,914 region. The retracement slide extended through the first half of the European session and dragged spot prices below the $1,900 mark, though lacked follow-through. The sharp pullback could be attributed to some profit-taking amid a pickup in demand for the US dollar, which tends to undermine the dollar-denominated commodity.

From a technical perspective, slightly overbought RSI (14) on the daily chart seemed to be the key factor that prompted traders to lighten their bullish bets. Hence, any subsequent decline might still be seen as a buying opportunity near the $1,888-$1,887 region. This should help limit the downside near the $1,880-$1,877 horizontal zone. Failure to defend the said support levels could pave the way for an extension of the corrective slide towards the $1,855-$1,853 zone. The latter marks a downward-sloping trend-line resistance breakpoint, extending from June 2021, and should act as a strong base for gold prices.

On the flip side, bulls might now wait for some follow-through buying beyond June 2021 high, around the $1,916 region before placing fresh bets. Gold could then accelerate the momentum and climb to the next relevant hurdle near the $1,930-$1.932 area.

Gold Underpinned $1900 on Geo-Political Tensions

farhan fazal

Feb 22 2022