Gold Gets Back Above $1950 Despite Strong Greenback

Key Insights

• Higher yields and stronger dollar failed to put pressure on gold markets. 
• Demand for safe-haven assets increased, which was bullish for gold. 
• The nearest significant resistance level for gold is located at $1965.

Gold Gains Some Ground Ahead Of The Weekend

Gold is currently trying to settle back above the $1950 level despite strong dollar and higher Treasury yields.

The U.S. Dollar Index has recently gained upside momentum and moved towards the resistance at 100.85, which is located near yearly highs at the 101 level. Meanwhile, the yield of 10-year Treasuries made another attempt to settle above its yearly highs near the 2.98% level.

Higher yields failed to put pressure on gold markets as demand for safe-haven assets increased. Yesterday’s major sell-off in the U.S. stock markets, which pushed S&P 500 below the 4400 level, indicated that traders remained nervous, which was bullish for gold.

VanEck Gold Miners ETF followed the general market sentiment and suffered a strong sell-off, which pushed it towards the $38 level. Today, VanEck Gold Miners ETF should have a good chance to rebound as gold prices are moving higher.

Technical Analysis

Gold has recently made several attempts to settle below the $1950 level, but these attempts yielded no results. Gold gets strong support in the $1935 – $1950 area, and it has a good chance to develop upside momentum after the recent pullback.

If gold settles back above $1950, it will head towards the resistance level at $1965. A move above this level will push gold towards the resistance at $1975. If gold manages to settle above the $1975 level, it will head towards the next resistance at $2000.

On the support side, the nearest support level for gold is located at $1935. If gold declines below this level, it will head towards the next support level at the 50 EMA at $1925. A successful test of the support at $1925 will push gold towards the support level at $1915.

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