Worries about the banking crisis have eased, and gold prices have continued to break through multiple resistance levels, making bulls hopeful

2023-03-17 16:55:54

Spot gold prices were on track for their biggest weekly gain since early November, marking a three-week winning streak even as markets held steady on Friday after a volatile week. With cautious optimism in the market sentiment, the precious metal gradually moved higher above the resistance confluence of $1925 and is currently trading at $1930.82 per ounce.

Adding to the bullish bias for gold could be bearish U.S. Treasury yields and efforts by policymakers and bankers around the world to avoid a repeat of the 2008 financial crisis.

Meanwhile, U.S. data could also be mixed, raising doubts about future rate hikes by the Federal Reserve, even if a 25-basis-point hike is all but certain.

Of course, the risk aversion sentiment has not completely subsided, and there are still some safe-haven funds still pouring into the gold market, providing support for the gold price. In the medium and long term, the market expects that central banks around the world have entered the end of the interest rate hike cycle, and the expectation of terminal interest rates has dropped significantly, which is expected to provide support for gold prices in the mid-term.

In addition, as one of the largest gold consumers, the hope of a sustained economic recovery in China has also given gold bulls hope.

Large U.S. banks injected $30 billion into First Republic Bank to rescue First Republic Bank, which was involved in the recent financial turmoil. The Swiss National Bank also threw out $54 billion in rescue aid to Credit Suisse. The market's response to the European and American banking crisis Worries have cooled down, and global stock markets have generally risen. Investors need to beware of short-term shocks and callbacks in gold prices or even the risk of peaking.

Traders, on the other hand, appear less convinced by the latest efforts to defend the global banking sector as the measures appear restrictive. Also, major central banks have scaled back expectations for easy rate hikes and are believed to be blocking information on the reasons behind the latest bank rout, which in turn puts gold traders at risk ahead of next week's Federal Open Market Committee (FOMC) monetary policy meeting situation.

This trading day needs to pay attention to the monthly rate of industrial output in the United States in February, the initial value of the University of Michigan consumer confidence index in the United States in March, and news related to the banking crisis in Europe and the United States.

London gold technical analysis

At present, gold prices are still stabilizing above the short-term key support level of $1925, which is the 38.2% retracement level of the one-day band.

If the upward momentum weakens, the $1,920 mark also acts as a downside support level, which includes the 10-hour MA and the top of the daily Bollinger Band.

It is worth noting that the vicinity of $1912 acts as the last line of defense for gold bulls.

After that, Thursday's low of $1,908 will be tested.

The next buffer is at the $1,900 mark, below which Tuesday's low of $1,895 could challenge bullish conviction.

Further declines would require a break above the one-week low of $1,886.

On the upside, gold bulls need to break Wednesday's high of $1,937 to accelerate their advance.

After that, $1945 acts as a short-term resistance.

After hitting the resistance level of $1953, gold prices will rise again to the yearly high of $1960.

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JRFX reminds you: the market is risky, and investment needs to be cautious. This article does not constitute personal investment advice. Please choose corresponding investment products according to your own financial and risk tolerance, and do a good job in corresponding risk control.

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