After touching above 2K, yellow metal returned under this key and psychological level, last seen in August 2022. As banking concerns have been lifting the Gold demand, with fewer concerns and more signs of confidence, trends reversed. Also, before the latest Federal Reserve policy meeting, European Central Bank President Christine Lagarde said on Monday that the current financial market tensions might lead the central banks to stop hiking interest rates earlier than expected, which means stock markets will have more support and gold interest can decrease.
On the other hand, the last two weeks’ banking tornado is not forgotten that soon. To review, Silicon Valley Bank, Signature Bank, and Silvergate collapsed in the United States, and then Credit Suisse faced the same problem. In US Fed, it was announced that the government’s bank-deposit insurance fund would cover all deposits at the two banks rather than the standard $250,000. UBS agreed to buy its embattled domestic rival Credit Suisse for 3 billion Swiss francs ($3.2 billion) in Switzerland. The Swiss government also provided 9 billion Swiss francs to cover potential losses that UBS may bear in the transaction. This deal ended Credit Suisse’s 167-year history as an independent financial institution.
Considering these data, market participants can again look after safe havens, which means today’s cool-down of Gold prices can be a short-lived correction before the next rally. From the technical point of view, 20-DMA at $1870 is the key pivot, and trading above this level still will favor the bulls. The first and second support sits at $1,914 and then $1,892. On the other hand, if the price rises, we have the first resistance at $1,976 and then $2,000.