THE precious metal succumbed to strong negative pressures after briefly clocking seven-year highs.
Military strikes between the United States and Iran spurred rapid flights of safety as investors worried about full-blown military conflict in the Middle East.
A de-escalation in US-Iran tensions late week led to strong selling momentum in the safe haven asset as risk-off appetites abated consequently.
Gold prices showed sharp market volatility as markets traded risk heavily for the current term.
What should investors look out for in the longer term?
Tensions will remain high in the Middle East despite political moves taken to defuse the current situation.
Gold prices have seen sharp intraday volatility (price movement: US$50-US$60) as market expectations shift over intense headline trades.
Softer geopolitical overtones will however impose negative pressures and spur long liquidation activities for gold in the near term.
Traders should however remain cautious of geopolitical happenings as price levels move aggressively over intense speculative activities.
Technical Analysis for Spot Gold (XAUUSD)
Gold prices whipsawed as market bulls struggled to retain positive gains above key psychological level of US$1,600.00.
The precious metal experienced strong selling momentum as price levels declined by more than 4.5 per cent from 2020-highs (US$1,611.00).
Failure to hold gold prices above previous lows of US$1,538.00 will trigger bearish pressures toward the key support level of US$1,520.00.
On the flip side, gold prices must break US$1,565.00 for a continuation of the bullish trend scenario in the near term.
Weekly Market Assessment:
Mildly Bearish
Key Resistance Level (1): US$1,565.00
Key Resistance Level (2): US$1,586.00
Key Support Level (1): US$1,520.00
Key Support Level (2): US$1,480.00
- The writer is an investment analyst at Phillip Futures
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