Gold: Investors not convinced it's end of the banking turmoil
Gold prices took a hit on Monday’s open after investors and traders started to move away from the safe-haven asset and into more riskier assets. This comes after the news about First Citizens BancShares Inc would take on the deposits and loans of failed Silicon Valley Bank which gives an overall sentiment of confidence to the markets that this “bad chapter” in the banking environment is coming to an end. However, gold remains the " safe-haven" asset at a higher than usual risk period for the banking sector, as risks of contagion are far more persistent than the market would like to believe.
‘Even though the “reassuring” events that are taking place in recent days regarding the banking sector boost investor confidence and seems to be increasing their risk appetite, the issue is not fully resolved yet and the risk of more bank failures is not eliminated in any case.’ said Antreas Themistokleous, an analyst at Exness ‘ Gold and Bitcoin will always be the “go-to” place for investors to limit their risk of excessive capital loss in periods of uncertainty and although volume is decreased the price of the yellow metal is still hovering around the $2000 mark’
From the technical standpoint the price seems to be making a correction in recent sessions however the majority of the technical indicators are not bearish just yet. The 50 day moving average is still trading above the 100 day moving average indicating the bullish momentum might still be in play while the 23.6% of the daily Fibonacci retracement level is currently acting as a support on the price. The Bollinger bands are showing signs of retraction indicating that the volatility might be running thinner. In the event of a continuation of the short term correction to the downside we might see some support building up around $1,930 which is the 38.2% of the Fibonacci retracement level and also an inside support area since late January 2023.
On the other hand if we witness a continuation of the overall bullish movement the area of $2,000 might be considered a strong resistance level which is the psychological resistance of the round number and also the last area of price reaction from the previous week.
‘Even though the “reassuring” events that are taking place in recent days regarding the banking sector boost investor confidence and seems to be increasing their risk appetite, the issue is not fully resolved yet and the risk of more bank failures is not eliminated in any case.’ said Antreas Themistokleous, an analyst at Exness ‘ Gold and Bitcoin will always be the “go-to” place for investors to limit their risk of excessive capital loss in periods of uncertainty and although volume is decreased the price of the yellow metal is still hovering around the $2000 mark’
From the technical standpoint the price seems to be making a correction in recent sessions however the majority of the technical indicators are not bearish just yet. The 50 day moving average is still trading above the 100 day moving average indicating the bullish momentum might still be in play while the 23.6% of the daily Fibonacci retracement level is currently acting as a support on the price. The Bollinger bands are showing signs of retraction indicating that the volatility might be running thinner. In the event of a continuation of the short term correction to the downside we might see some support building up around $1,930 which is the 38.2% of the Fibonacci retracement level and also an inside support area since late January 2023.
On the other hand if we witness a continuation of the overall bullish movement the area of $2,000 might be considered a strong resistance level which is the psychological resistance of the round number and also the last area of price reaction from the previous week.