Gold falls below $1900 on expectations of more aggressive Fed; strong dollar
Spot gold accelerated lower on Monday, losing more than 1.5% and probed below $1900 mark for the first time in more than three weeks.
Robust US dollar, which holds near the two-year high against the basket of major currencies, driven by strong safe-haven demand and signals of more aggressive policy tightening by the US central bank, deflate the yellow metal.
These factors so far offset the impact of soaring inflation which hit the record high in the EU and stands at the highest in four decades in the US, hurt gold’s appeal as a main hedge against inflation.
Fresh weakness pressures key support at $1890 (Fibo 61.8% of $1780/$2070 / low of the pullback from $2070 peak) with firm break here to signal an end of prolonged range-trading and open way for continuation of the bear-leg from $2070 (Mar 8 high).
Daily techs show the price establishing below daily cloud (cloud base lays at $1925) with converged daily Tenkan-sen / Kijun-sen about to for a bear-cross and 14-d momentum heading south and deeper into negative territory that adds to negative signals.
However, growing uncertainty over the conflict in Ukraine and all negative impact it produces, keeps the metal attractive as safe-haven asset, with deeper dips still to keep the price within the range between record highs at $2074/70 and the lower boundary at $1680 zone that keeps larger uptrend intact.
Res: 1925; 1935; 1942; 1953
Sup: 1890; 1878; 1872; 1853