Gold Falters Again at $3400 as Traders Shrug Off Geopolitical Risk
With crude off its highs and risk assets rebounding, gold’s muted response to Middle East tension is telling. Momentum is stalling and $3400 remains a roadblock—leaving bulls with little to cling to without a fresh catalyst.
Share this:
Gold Summary
Gold is trading poorly in an environment where it would normally be thriving, hinting that directional risks may be skewing lower in the near term without another major escalation in geopolitical tensions in the Middle East. With riskier asset classes coming off their lows and crude prices now well off their opening highs, it suggests there may not be a scramble for safe havens as seen during similar episodes in the past.
Gold Fails at $3400 Again
Source: TradingView
Looking at gold on the daily timeframe, after two consecutive doji candles leading into the weekend, the price pushed back towards $3400 per ounce but was unable to reclaim the level. That fits with the price action seen earlier in the month, outside of the failed bullish break on June 13 when Israel first launched attacks on Iranian targets.
The reversal from this known resistance level only adds to the unconvincing price action we’ve seen in gold lately, making traders question: what more would it take to see the haven retest the record highs set earlier in the year? Something far more than what was seen over the weekend, it seems.
While indicators like RSI (14) and MACD sit in mildly bullish territory, there’s little evidence of a major acceleration in bullish momentum despite Middle East tensions. MACD has even crossed the signal line from above, providing an early warning that market momentum may be turning lower.
$3400 remains a key level to watch on the topside. If gold can climb above this level, it may encourage other bulls off the sidelines to look for a push towards the June 16 high of $3451.30 or even $3500.
However, if unable to reclaim $3400, it would make for a decent entry level for shorts, allowing for stops to be placed above the level for protection. $3340 provided support and resistance earlier this month, meaning it screens as an appropriate initial target. If it were to give way, the important 50-day moving average and December 2024 uptrend would loom as a far tougher test for shorts.
Related tags:
Latest market news
Open an account in minutes
Experience award-winning platforms with fast and secure execution, and enjoy tight spreads from 0.5 pts on FX and 0.3 pts on indices.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
Crude Oil Prices Fall, What the U.S. Midterms Mean for Brent
Crude oil prices have pulled back more than 11% from October highs, in line with U.S.-Iran negotiation hopes and shifting U.S. midterm expectations.
EUR/USD, Gold Forecast: Two trades to watch
EUR/USD rises on USD weakness and as Eurozone inflation hits 4%. Gold – U.S. midterms lift precious metal above $4,000.
Gold Analysis: Resilient U.S. Labor Market Continues to Pressure XAU/USD
Recent trading sessions have not been particularly favorable for gold in the short term. XAU/USD has fallen nearly 2.5% over the last three sessions, reflecting that selling pressure is once again gaining relevance and that the metal continues to struggle to regain momentum.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.forex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.