The decline in gold prices on Monday was attributed to fading hopes of a March interest rate cut by the Federal Reserve, leading to a 0.4% drop in spot gold prices. The market is now adjusting its optimism about rate cuts, with a 48% chance of a rate cut in March according to the CME Fed Watch Tool. This is down from almost 77% chance last week and is a strong indication of the probability of a softer stance by the Federal reserve at least for the time being. The decline in gold prices was also influenced by a 1% fall last week and a decrease in the U.S. dollar index.
From the technical point of view gold price is currently trading within the dynamic support area between the 50 and the 100 day moving averages. The psychological support level of $2,020 has proven to hold strong in the recent past where it is also the 38.2% of the daily Fibonacci retracement level. The Stochastic oscillator is not recording any overbought or oversold levels indicating that the price can move to either direction in the near short term. If the $2,020 proves to hold strong once again and pushes the price to the upside then the first area of possible resistance might be seen around the $2,060 which consists of the area just below the 23.6% of the daily Fibonacci retracement and is also the psychological resistance of the round number.
From the technical point of view gold price is currently trading within the dynamic support area between the 50 and the 100 day moving averages. The psychological support level of $2,020 has proven to hold strong in the recent past where it is also the 38.2% of the daily Fibonacci retracement level. The Stochastic oscillator is not recording any overbought or oversold levels indicating that the price can move to either direction in the near short term. If the $2,020 proves to hold strong once again and pushes the price to the upside then the first area of possible resistance might be seen around the $2,060 which consists of the area just below the 23.6% of the daily Fibonacci retracement and is also the psychological resistance of the round number.