Gold settled above the resistance at $1965 and is testing the next resistance level at $1975.
Gold is currently trying to settle above the resistance at $1975 as demand for safe-haven assets remains strong despite rising Treasury yields.
Yesterday’s pullback in Treasury yields was short-lived, and the yield of 30-year Treasuries has already managed to get to news highs at 2.86%. Treasury yields keep moving higher as traders expect that Fed would have to raise rates and cut the size of its balance sheet aggressively to fight inflation.
At the same time, geopolitical tensions continue to provide material support to gold markets. In addition, it looks that traders are also betting on gold due to its role as a traditional inflation hedge.
Interestingly, VanEck Gold Miners ETF failed to settle above the $40 level on Tuesday despite the bullish mood in the gold markets. Today, it should make another attempt to settle above this level as gold prices continue to move higher.
Gold is testing the resistance level at $1975. This resistance level has already been tested during yesterday’s trading session and proved its strength.
In case gold manages to settle above $1975, it will head towards the next resistance level at $2000. RSI is in the moderate territory, and there is enough room to gain additional momentum in case the right catalysts emerge.
A move above the resistance at $2000 will push gold towards the next resistance at $2020. If gold gets above this level, it will move towards the resistance at $2050.
On the support side, the previous resistance at $1965 will serve as the first support level for gold. In case gold manages to settle back below this level, it will head towards the next support at $1950. A successful test of the support at $1950 will open the way to the test of the next support at $1935.
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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.