Gold extended its losses for the fourth consecutive session on Monday and dropped to over 2-week lows in the last hour. What caused the metal’s downfall at the start of a new trading week? The answer is given in the 19 March Gold Price Technical Outlook. Read on.
19 March, GKFX – A follow-through US Dollar buying interest has been one of the key factors exerting downward pressure on dollar-denominated commodities – like gold. This coupled with a goodish pickup in the US Treasury bond yields, amid expectations for an imminent Fed rate hike move this week, was further seen driving flows away from the non-yielding yellow metal.
The precious metal’s downfall at the start of a new trading week could also be attributed to some technical selling, especially after Friday’s bearish break below a one-week-old trading range. Hence, a fall towards testing the very important 200-day SMA support, currently near the $1305 region, now looks a distinct possibility.
Investors look forward to the Fed decision for fresh directional impetus
Investors, however, are likely to refrain from placing any aggressive bets and might prefer to wait for the passage of this week’s key event risk – the highly anticipated FOMC decision, before positioning for the commodity’s next leg of directional move.
Meanwhile, a fresh wave of global risk aversion trade, as depicted by a sea of red across global equity markets, was seen lending some support to the precious metal’s safe-haven appeal and might also contribute towards limiting further downfall, at least for the time being.
19 March Gold Price Technical Outlook
The $1305 region (200-DMA), closely followed by the $1300 handle, might continue to act as immediate support levels, below which the metal could slide towards 100-day SMA support near the $1290 region.
On the upside, $1313 area now seems to have turned as an immediate resistance, which if cleared might trigger a short-covering bounce and lift the commodity back towards $1320-22 supply zone.
This article 19 March Gold Price Technical Outlook was written by analysts at GKFX. The information provided herein is for general informational and educational purposes only. It is not intended and should not be construed to constitute advice.
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