Recently, news of the Russian President visiting the Chinese president became news highlighted by analysts, reflecting the rift in the global order into a map of geopolitical partners that allows trade to focus more on their geopolitical partners.
At market open Monday, gold rose to a high of $2,450 on news of the Iranian president’s death. However, the rise did not continue and gold prices pulled back to reach $2407 as comments from Federal Reserve (The Fed) Deputy Chairman for Supervision Michael Barr suggested interest rates should remain at current levels for longer for inflation to return to target in a sustainable manner.
Even though it fell to a low level of $2407, the price of gold rose again to reach $2436 and waved down again to $2423. The market seems to be consolidating, but several factors supporting gold include:
- Instability in the Middle East region due to the death of the Iranian president, Ebrahim Raisi, and several other important officials due to a plane crash.
- The Fed is likely to lower interest rates, this will also give a boost to gold
- Fractures in the world order encourage countries’ central banks to buy gold for reserves. This can be seen from the ties between President Putin and the President of China during a recent visit to China, giving a picture of the cracks in the world order. BRICS members who no longer use USD choose gold as their reserve.
Gold price analysis today
Gold prices failed to continue their rally on Monday, pullbacks and surging prices reflect market consolidation.
On the daily timeframe, gold prices are moving near the upper band line which may be a resistance zone. However, the expanding Bollinger band line reflects increased volatility.
MA 50 crossed the lower band line from the downside drawing an ascending channel reflecting bullish momentum.
However, this signal received an alert from the RSI which pointed to level 67, which means the price was slightly below the overbought level.
H1 timeframe
In this time frame, the gold price below the middle band line reflects the price below the downtrend line. The Bollinger band structure draws a flat channel with slightly narrowed bands reflecting a sideways market with decreasing volatility.
Meanwhile, the MA 50 line structure draws an ascending channel below the lower band line, reflecting a bullish signal.
And the RSI indicator points to level 53, which means the price is above the uptrend level
Support and resistance
S3: 2414.33
S2: 2420.26
S1: 2423.54
PP: 2429.47
R1: 2432.75
R2: 2438.68
R3: 2441.96