Since I wrote my last piece on Monday, Gold futures experienced selling pressure, as the Federal Reserve's efforts to fight inflation with interest rate hikes may continue for a longer period. On Wednesday, gold futures faced resistance at the immediate level of $1,853 and closed the day at $1,833, indicating increasing weakness and continued control by bears.
Despite growing global uncertainty due to tensions between the U.S. and Russia, the strong dollar has weakened gold prices.
In the daily chart, gold futures have faced consistent resistance at the 9 DMA of 1,841 since the formation of a bearish crossover on Feb. 2. As a result, there has been a sharp downward move that is still in effect.
If gold futures do not maintain support at $1,827 during today's trading session, bears may trigger a sell-off and push gold futures towards the next support level of $1,817. If a sustainable move below the pivotal point of $1,815 occurs, this could result in further decline towards the 200 DMA of $1,781.
The current geopolitical moves by the Western alliance against Russia to resolve the Russia-Ukraine war may prolong uncertainty if not resolved promptly. Furthermore, a strong U.S. dollar could affect global currencies, as central banks are struggling to control the sharp surge in inflation since the Russian invasion of Ukraine on Feb. 24, 2022, which led to a rise in energy prices.
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Disclaimer: The author of this analysis may or may not have any position in the gold futures. Readers can take any long or short trading position at their own risk. Involved risk in trading needs to be taken care of before creating any trading call.