Gold has experienced a violent movement over the past two days, losing more than $100 of its value after falling from its peak at 3,396 to 3,295. This decline was not random; rather, it resulted from the intersection of several fundamental and geopolitical factors, in addition to clear technical signals. In this analysis, we discuss the complete picture by combining technical analysis with fundamental analysis to provide a balanced and clear view of future scenarios.
Technical analysis:
Gold is currently trading on the hourly chart between a key resistance level at 3,340 and a strong support level at 3,320. The rebound after touching support reflects the presence of buying power, but it remains cautious. Continued gains are contingent on breaching and holding above 3,340, which would position gold for a rally towards 3,380 and possibly 3,400.
However, if gold fails to break through resistance and strong US data emerges, it is expected to fall again to test the 3,300 level, and possibly the previous low at 3,295.
Fundamental analysis:
The primary factor contributing to gold's decline was Federal Reserve Chairman Jerome Powell's testimony before Congress, where he made it clear that the central bank is in no hurry to cut interest rates and is awaiting real evidence of declining inflation before making any decisions. Markets viewed these statements as negative for gold, as they support the continued strength of the dollar in the near term.
The second factor is the decline in geopolitical tensions following the announcement of a ceasefire between Iran and Israel. Gold typically receives support from tense political and military events, and when calm prevails, demand for it as a safe haven decreases, pushing prices down.
However, it's important to note that this calm is still fragile, and any sudden escalation—whether through a collapse of the truce or a new US military intervention—could lead to a sharp and immediate rebound in gold.
