Silver and Gold Technical Analysis: In the Face of Increasing Volatility, Key Support Holds
Strong technical support around $4,400, continued uncertainty over Fed policy, and the strength of the USD could support a bullish rebound. Old fell to $4,680 as growing margin requirements, equity market stress, and reducing geopolitical tensions put pressure on prices.
The price of gold (XAU) fell to roughly $4,680 in early Asian trading on Friday. In response to stock market losses, traders covered positions. The Michigan Consumer Sentiment Index, which could affect predictions for inflation and interest rates, is currently awaited by the market.
It became more expensive for traders to hold positions in Gold and Silver (XAG) futures when the CME Group raised the margin requirements. Some participants were obliged to sell as a result of that adjustment. Short-term metal weakness was exacerbated by the decline in tech stocks, which also compelled dealers to sell gold in order to satisfy collateral requirements.
Gold's attraction as a safe haven has decreased, however, as there are indications that the geopolitical tensions between the US and Iran are abating. However, there is still ambiguity over the Fed's future course of policy. The US President's remarks raise questions about the Federal Reserve's independence, which should devalue the US dollar and support gold in the coming sessions.
Technical Analysis of Gold
Ascending Broadening Wedge Pattern on the XAUUSD Daily Chart
According to the spot gold daily chart, the price fell sharply from $5,600 to $4,400 before rising again. The strong support at $4,400, which can be seen where the 50-day SMA and the support line of the ascending expanding wedge formation cross, is what caused this bounce.
Additionally, as the price approaches the ascending expanding wedge pattern's support, the RSI is also touching the 50 level. A robust rebound above $5,050 will signal additional gold price growth. However, another decline towards lower levels will be triggered by a breach below $4,400.
The chart below also shows the ascending expanding wedge pattern's solid support. The red circles on the chart below indicate that the price made a second run at the ascending broadening wedge pattern's support.
Positive momentum is indicated by a significant recovery from this level. To normalize the steep decline from $5,600, the price can, nevertheless, short-term consolidate. The structure is still very positive overall, and after this consolidation is finished, the price can rise further.
It became more expensive for traders to hold positions in Gold and Silver (XAG) futures when the CME Group raised the margin requirements. Some participants were obliged to sell as a result of that adjustment. Short-term metal weakness was exacerbated by the decline in tech stocks, which also compelled dealers to sell gold in order to satisfy collateral requirements.
Gold's attraction as a safe haven has decreased, however, as there are indications that the geopolitical tensions between the US and Iran are abating. However, there is still ambiguity over the Fed's future course of policy. The US President's remarks raise questions about the Federal Reserve's independence, which should devalue the US dollar and support gold in the coming sessions.
Technical Analysis of Gold
Ascending Broadening Wedge Pattern on the XAUUSD Daily Chart
According to the spot gold daily chart, the price fell sharply from $5,600 to $4,400 before rising again. The strong support at $4,400, which can be seen where the 50-day SMA and the support line of the ascending expanding wedge formation cross, is what caused this bounce.
Additionally, as the price approaches the ascending expanding wedge pattern's support, the RSI is also touching the 50 level. A robust rebound above $5,050 will signal additional gold price growth. However, another decline towards lower levels will be triggered by a breach below $4,400.
The chart below also shows the ascending expanding wedge pattern's solid support. The red circles on the chart below indicate that the price made a second run at the ascending broadening wedge pattern's support.
Positive momentum is indicated by a significant recovery from this level. To normalize the steep decline from $5,600, the price can, nevertheless, short-term consolidate. The structure is still very positive overall, and after this consolidation is finished, the price can rise further.
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