Gold Price Analysis: Will Geopolitical Tensions Drive Gold Higher?
The price of gold is currently consolidating around $2640, showing little volatility despite the strong U.S. jobs report released last Friday. The report exceeded expectations, with 254,000 new jobs created and higher hourly wages, indicating a robust economy.
With the Federal Reserve in no rush to cut interest rates due to the strong economy, the appeal of gold as a safe-haven asset is somewhat diminished. However, escalating tensions in the Middle East, such as Iran’s missile launch towards Israel, are supporting gold demand as investors seek safety in uncertain times.
According to CFTC data, net speculative positions in gold have decreased, suggesting investors are cautious amid interest rate and geopolitical uncertainties. From a technical standpoint, Bollinger Bands indicate stabilization, while the MACD and Stochastic indicators suggest a potential short-term decline followed by a possible undervaluation of gold.
Key resistance levels for gold include 2655.00 and 2670.00, with support at 2640.00 and 2623.84. A trading strategy could involve short positions if the price breaks below 2640.00, with a target at 2613.83 and a Stop Loss at 2655.00. Conversely, long positions may be considered if gold holds 2640.00 as support and breaks above 2655.00, targeting 2685.56 with a Stop Loss at 2640.00, on a short-term basis of 1 to 2 days.
In conclusion, gold is currently in a cautious phase as investors weigh strong economic data against geopolitical tensions. Monitoring technical levels and being prepared to act swiftly as the market evolves will be crucial in navigating the uncertainty ahead.