- The XAU/USD (Gold) commodity starts the week positively, trading at $1,906.70, up by 2.11% on the day.
- Increased market volatility and rising risk led to a surge in demand for safe-haven assets like Gold.
- Technical indicators, such as the daily 20-SMA and 50-SMA, suggest a potential bullish outlook for gold.
- Due to risk aversion, US yields have reached their lowest levels in recent months.
Daily price movements:
XAU/USD (Gold) commodity opens the first day of the week at $1,867.24, with an intraday high of $1,913.13 and a low of $1,867.24. Gold trades at $1,906.70 at the press time for the first time since February 3rd, 2023, up by 2.11% on Monday.
The sharp drop in US yields is considered the primary catalyst for the rise in the price of Gold. The US 10-year yield has fallen to 3.41%, approaching its year-to-date lows from its previous level above 4.0%. Meanwhile, the 2-year yield reached its highest since 2008 and fell to its lowest intraday level since October 2022, at 4.00%.
Following the collapse of Silicon Valley Bank (SVB), concerns have arisen about the state of the banking sector, which has caused a decrease in expectations for a rate hike by the Federal Reserve (Fed). Investors are watching the potential impact of this crisis on economic data.
Key economic events:
The upcoming US February Consumer Price Index (Feb) on Tuesday and US Retail Sales (Feb) on Wednesday are expected to be critical for monetary expectations and is also closely monitored.
However, following the unexpected SVB collapse, markets are now pricing in a more relaxed stance by the Fed.
Technical indicators suggest a potential bullish outlook for Gold in the short term. The daily 20-SMA and 50-SMA are at $1,838.83 and $1,873.21, respectively, indicating a possible bullish trend. The RSI(14) is at 64.970, indicating potential bullish momentum.
Resistance levels for Gold are at $1,884.08, $1,898.25, and $1,926.40, while support levels stand at $1,841.76, $1,813.61, and $1,799.44. The daily pivot point is $1,855.93.