Gold Managed To Settle Above The Important Resistance At $1950

Key Insights

• Gold tries to continue its rebound, while Treasury yields stay close to recent highs. 
• Geopolitical tensions increase, so demand for the safe-haven gold stays strong. 
• A move above $1960 will push gold towards the resistance level at $1975.

Gold Is Mostly Flat Ahead Of The Weekend

Gold continues its attempts to settle above the $1960 level as geopolitical tensions increase. Yesterday, Western countries unveiled a new set of sanctions against Russia, while the latter continued to push for rouble-denominated payments for its gas.

Interestingly, riskier assets like S&P 500 showed strong performance despite multiple risks to global economic growth. Meanwhile, VanEck Gold Miners ETF made an attempt to settle above the $39 level but lost momentum and pulled back towards $38.50.

Traders also continued to monitor the developments in U.S. government bond markets. Treasury yields stay close to recent highs, although they have lost some upside momentum. This is bullish for gold and other precious metals that pay no interest. However, it looks that additional rally in Treasury yields is almost inevitable as the Fed will start to reduce the size of its balance sheet to curb inflation.

Technical Analysis

Gold managed to get above the $1950 level and is trying to develop additional upside momentum. RSI remains in the moderate territory, and there is plenty of room to gain momentum in case the right catalysts emerge.

The nearest significant resistance level for gold is located at $1975. If gold settles above this level, it will move towards the next resistance level at $2000. A successful test of the resistance at $2000 will push gold towards the resistance at $2020.

On the support side, gold needs to get back below the $1950 level to have a chance to develop downside momentum in the near term. The next support level for gold is located at the 20 EMA at $1940.

In case gold manages to settle back below the 20 EMA, it will move towards the support level at $1915. A successful test of this level will open the way to the test of the support at the 50 EMA at $1900.

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