Gold technical analysis this week

After recent events of banks stopping their operations, the price of gold made gains. Gold is an attractive addition to investors’ portfolios because of its relative “stability” to balance out the uncertainty that is currently holding strong throughout the markets. 

Gold has been traditionally considered a safe haven asset in times of uncertainty, and this is what is currently happening following the failure of three banks last week. The Federal Reserve might also slow down its pace of rate hikes, and this can also be seen on the Fedwatch tool with the probability of a hike not exceeding 35%.

This was not a forecastable scenario until Friday, March 10th but is now gaining more ground coming up to the next FED meeting on March 22nd.

Gold Technicals

From a technical point of view, the gold price is trading above the upper band of the Bollinger bands indicating great volatility in the market. The 50-day moving average is trading above the 100-day moving average further supporting the bullish momentum which is currently in effect. 

The Stochastic oscillator is showing an overbought level, but this should add little influence to the bullish movement of the yellow metal. With the majority of the technical indicators showing a bullish image, the most probable scenario (in the short term) is for the price to continue traveling North on the chart, with a first point of possible resistance around the $1,960 price area, which is an inside resistance level since early February.

In the event of a correction to the downside, the first point of possible support might be found around $ 1,880 at the crossing of the 50-day moving average, the upper band of the Bollinger bands, and the 23.6% of the daily Fibonacci retracement level.

This is not investment advice. Past performance is not an indication of future results. Your capital is at risk, please trade responsibly.

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Author:

Antreas Themistokleous

Antreas Themistokleous is a trading specialist in Exness. He is a Certified Financial Technician since 2018. As a member of the Society of Technical Analysts, Antreas is implementing advanced use of indicators and patterns to conclude in an action plan for different trading strategies.