Gold Rallies Above $2000 As Demand For Safe-Haven Assets Stays Strong
- Gold continues to move higher amid huge rally in commodity markets.
- Most likely, gold traders will ignore the dynamics of the U.S. dollar and stay focused on geopolitical developments.
- A move above the resistance at $2000 will push gold towards $2020.
Gold Moves Closer To 2020 Highs
Gold managed to get above the psycholigically important $2000 level as traders continued to move their funds into safe-haven assets.
Interestingly, the safe-haven U.S. dollar has recently lost momentum against a broad basket of currencies, while S&P 500 futures moved into the positive territory in premarket trading.
While weaker dollar is typically bullish for gold, the current situation is unique as the dynamics of both the U.S. currency and gold are determined exclusively by the demand for safe-haven assets.
The near-term dynamics of the gold market will remain dependent on the geopolitical developments. In the longer-term, traders will have to pay attention to the actions of the Bank of Russia, which has lost a significant part of its reserves due to sanctions and may have to sell gold in order to support the national currency.
Gold is testing the resistance level at $2000. In case this test is successful, gold will move towards the next resistance, which is located at $2020. It should be noted that RSI has reached the extremely overbought territory, so the risks of a pullback are increasing.
A move above the resistance at $2020 will open the way to the test of the next resistance at $2050. If gold manages to settle above this level, it will head towards the resistance at 2020 highs at $2075.
On the support side, a move below $2000 will push gold towards the support at $1975. In case gold manages to settle below this level, it will head towards the next support at $1950. A move below the support level at $1950 will push gold towards the support at $1930.
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