On Thursday, after an impressive rally to its highest level since September 2020 at 1,974, the yellow metal fell below 1,900. At the close of the US session on Friday, it erased three-week gains and price hovered around 1,888.
The market action showed that gold is a safe haven asset, but investors are also quick to sell first when the mood improves.
The White House announced on Sunday night that US President Joe Biden has agreed to meet with his Russian counterpart Vladimir Putin later in the week, allowing markets to breathe a sigh of relief.
This data is giving gold this optimism and it is trading above the psychological level of 1,900. According to the 1-hour chart, it is above the 200 EMA and above the 21 SMA.
In the next few hours, gold is expected to continue bouncing above 1,900 and could reach the target of 6/8 Murray located at 1,937 and up to 7/8 Murray at 1,968.
Investors are keeping an eye on geopolitical headlines that fuel fears. Global risk aversion could give gold a strong boost and the pirce could hit its high again at 1,974.
Conversely, a daily close below the 200 EMA located at 1,894 could accelerate the move down and cover the gap left at 1,888. So, the price may reach support 4/8 Murray around 1,875.
Our trading plan for the next few hours is to buy gold above the psychological level of 1,900 or wait for a bounce around the 200 EMA at 1,894, with targets at 1,937 and 1,968 (7/8 Murray).
The eagle indicator is in an extremely oversold zone. An imminent technical bounce is likely in the next few hours.
Support and Resistance Levels for February 28, 2022
Resistance (3) 1,949
Resistance (2) 1,936
Resistance (1) 1,912
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Support (1) 1,897
Support (2) 1,873
Support (3) 1,859
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Scenario
Timeframe H1
Recommendation: buy above
Entry Point 1,900
Take Profit 1,937; 1,968
Stop Loss 1,890
Murray Levels 1,968(7/8), 1,937(6/8) 1,906(5/8), 1,975(4/8)
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