Once again, gold retreats below $2000
Improved investor sentiment leads to profit-taking on the yellow metal
Gold was unable to maintain highs near $2,000
Profit-taking in the yellow metal market has been fueled by improved investor sentiment toward the banking crisis
The $1,934 level is a crucial support level for gold
Acquisition of Silicon Valley bank calms markets
During the past few weeks, markets have experienced a state of uncertainty and instability, especially after news emerged regarding the bankruptcy of 3 American banks and the economic problems faced by Credit Suisse Bank.
The news led investors to a quick fix by rushing to buy safe havens which contributed to golds rise near $2,000. However, gains were capped as investor sentiment improved regarding the banking crisis, especially after the acquisition deal announcement for SVB. Meanwhile, Investors are currently evaluating the steps taken by authorities to calm fears of a global banking system crisis.
Gold is currently witnessing a slight decline in the second session of the week, trading near the $1,953 level, as markets await the release of US consumer confidence data today, which is likely to have an impact on gold prices.
Key Technicals for Gold
Gold attempted several times to test the $2,000 resistance level but failed to hold above it. It has extended its decline to the $1,950 level and is now trading around it. The main and important support level for gold is around $1,934. If this level is broken, a negative double top pattern may be completed, extending the decline to the $1,912 level. If this level is also broken, the decline may extend further to $1,887. Therefore, it is important for gold to maintain the support level of $1,934 to sustain its upward trend in the medium term.
If gold rises above the $1,966 resistance level and holds above it, this may contribute to further upward movement to test the strong resistance level of $2,000. This level is important to surpass to demonstrate the intention of further upward movement and to test the historical high that gold achieved in March 2022, around $2,070.