gold prices are experiencing a slight pause in their upward trend, hovering just below the $2,530 level after a three-day rally. This shift comes as the US dollar attempts a rebound amid a prevailing risk-averse sentiment in the markets, while sluggish Treasury bond yields continue to affect investor behavior. Traders are adopting a cautious stance as they await comments from Federal Reserve officials and the upcoming earnings report from Nvidia .
On Wednesday, gold prices dipped, reflecting similar patterns from the previous day’s trading sessions, as investors anticipate insights regarding future interest rate adjustments from Fed policymakers. The overall market mood is tempered by geopolitical tensions in the Middle East, coupled with the earnings release from Nvidia , which has investors on edge prior to the US inflation data scheduled for release later this week.
Amidst the risk-off sentiment, the US dollar is witnessing renewed demand, exerting downward pressure on gold prices. However, the lack of movement in US Treasury yields may provide a cushion against further declines in gold . Additionally, the market’s expectations for more dovish Fed policies and heightened geopolitical risks continue to support gold ’s value. Recent statements from US officials have indicated concerns regarding potential Iranian actions, adding to the geopolitical uncertainty in the region.
Technical analysis suggests that while gold has entered a corrective phase, bullish sentiment remains intact as long as prices remain above the previous support level of $2,466. The 21-day Simple Moving Average, approaching this level is expected to bolster the performance. Analysts note that trading momentum for gold looks favorable if prices can surpass the recent high of $2,532, potentially targeting $2,600 and beyond.
Investors are closely monitoring the $2,500 level for initial demand, as a drop below this spot could open the door to further declines, potentially testing the $2,485 level. A significant breach of this level may invite more bearish pressure, challenging the established support at $2,466.
