Gold fell over 1.5% due to concerns regarding large interest rate hikes in the US
Gold dropped more than 1.5% today and broke below $ 1,900 an ounce. Earlier at the beginning of today's trade, price fell below the 50.0 retracement of the entire pandemic rebound. Earlier price twice tested support around USD 1,900, however demand side managed to halt declines. Now, the key test for gold is the region between $ 1890-1900. The current situation is similar to 2011-2013, when the $1500-1530 zone was tested, also among fears regarding monetary tightening. However at the moment expectations are even higher, although it must be remembered that liquidity conditions also improved. A potential break below $1900 permanently could initiate a bigger downward move towards the area around $1600-1700 in the longer term, as indicated by the current levels of US bond yields. On the other hand, it should be remembered that gold is also seen as a hedge against inflation and geopolitical turmoil, which we are now dealing with. If buyers manage to defend the area around $ 1890-1900 then gold may move into consolidation.
Source: xStation5
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appThe content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
