Since I wrote my last article last Monday, I have been under selling pressure, on expectations that the Federal Reserve’s efforts to fight inflation by raising interest rates will continue for a while longer. On Wednesday, gold futures met resistance at $1,853 and closed at $1,833, indicating weakness by bulls and continued control by bears.
Despite the growing global uncertainty due to tensions between the US and Russia, the strong has caused gold prices to weaken.
On the daily chart, gold futures have encountered consistent resistance at the 9 DMA at 1,841 since the bearish cross on Feb 2. As a result, there was a sharp downward movement that is still going on.
If gold futures cannot hold the support at $1,827 during today’s trading session, bears may press and trigger more selling and push gold futures towards the next support at $1,817. If a sustained move below the pivot point of $1,815 occurs, it could result in a further decline towards the 200 DMA of $1,781.
If the current geopolitical moves by the Western coalition against Russia cannot quickly resolve the crisis of the Russian-Ukrainian war, this may cause the uncertainty to prolong. Moreover, a strong US dollar may affect global currencies, as central banks struggle to control the sharp rise in inflation since the Russian invasion of Ukraine on February 24, 2022, a situation that drove up energy prices.
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Disclaimer: The author of this analysis may or may not have open positions in gold futures. Readers may make any decision to open a Buy or Sell position at their own risk. They must be aware of the risks involved in trading before making any decision to trade.
