Gold prices were trading neutral since morning. Yellow metals posted its strongest weekly gain in two months as fears of a potential banking crisis drove up safe haven demand.
Bullion prices also benefited from doubts over whether the Federal Reserve had enough headroom to keep raising interest rates, given the growing pressure on the economy.
But a rush into safe havens provided the biggest boost to gold, as the collapse of several regional U.S. banks ramped up concerns over contagion in the broader economy, as well as fears of a looming recession
The collapse of Silicon Valley Bank and other smaller regional peers saw markets pile into gold this week. While government intervention and the bailout of other stressed lenders helped stem fears of contagion, markets still remained on edge over a broader banking crisis.
Technical Outlook
As expected, after breaching the resistance 57780 GOLD prices sparked. Prices inched higher towards 58661. Hit both predicted levels of 58000-58250
Since 6 March 2023, Gold prices witnessed a speculative jump from the low of 54771 to recent high of 58661. On the daily chart, GOLD future has broken up its previous swing high of 57780 on 15 March 2023 and managed to trade above it.
Recent price action resulted in formation of high wave candlestick which is indicating lack of trading activities. However, prices traded above 261.8% Fibonacci Retracement which is indicating bullishness towards the next resistance of 361.8%.
Hence, fresh bullish momentum expects to come above 58295 for target 58620 with stop loss below 58120. Else, failure of the break will create a probability for temporary correction. And possible pullback could be expected from 57950-58050 cmp 58275.
On the downside, 57750 will act as a crucial support break below only, GOLD prices retreat towards 57250-57050.
Today, Gold prices will react strongly after US Prelim UoM Consumer Sentiment data which will be released at 7.30pm. For more detail kindly read the economic report.
Hence trade cautiously.Â