Gold Daily Forecast Gold is retreating from a three-week peak near 5, 250 as a stronger US Dollar and profit-taking activity are cooling down the recent rally. The rally had initially been encouraged by the uncertainty over US trade policy and the ongoing tense situation in the Middle East. Nevertheless, as the dollar finds its footing and traders are taking their profits, the metal is presently going through a corrective stage rather than breaking out to new highs immediately. The most recent up and down movements are led. On Friday, the Supreme Court of the United States concluded that the erstwhile global tariff framework implemented by Donald Trump was beyond the scope of the executive authority. Besides, the administration promptly instituted temporary 15% tariffs, which, it was said, were due to a balance of payments emergency. Although the White House is firm that these steps are essential for the protection of domestic interests, a good number of economists are skeptical about the legal and economic justification. Now investors are holding their breath for a sign of how long-lasting or wide-ranging these new trade measures might be. Geopolitical risks have kept the markets largely unsettled. The focus is tightly fixed on the US-Iran confrontation as the two sides get ready for the third round of negotiations. It is said that Washington is mulling over an enhanced military presence in the area, which might include sending more naval vessels. A new wave of tensions related to Irans nuclear issue could very quickly result in increased safety, driven demand. Later today, if any new policy indications on trade or foreign affairs come up, President Trumps State of the Union speech might bring about more instability in the market. In such an environment, Gold has slightly decreased but is still technically sturdy. The precious metal has broken a four-day rally run and is currently close to a very strong support level at 5, 141. This point corresponds to the 61.8% Fibonacci retracement of the price correction from January 29 to February 2 after the record high. The intersection of Fibonacci support and the recent price consolidation makes this spot a very important piece for the short-term momentum. If the metal fails to hold 5, 141 for a while, it might lead to a longer retracement. Moreover, the 20-day Simple Moving Average, slightly below the psychological 5, 000 level, is another element of dynamic support. The round, number importance of 5, 000 plus the trend support adds to its value. As long as the price stays above this area, the main bullish trend will not be broken. Momentum indicators show that the downward move is just a correction and not the start of a new trend. The Moving Average Convergence Divergence is still signaling positive conditions, but the histogram has become narrower. This shows an increase in the rate at which the upside momentum is slowing down. The MACD line continues to be higher than the signal line, but the difference between the two lines has become smaller. This is an indication of a change to a more careful sentiment. At the same time, the relative strength index is still above the 50 midpoint line, which is a sign of fundamental strength even though the conditions are somewhat weaker. The RSIs move away from higher readings can be viewed as a drop in momentum, but it does not display any sign of being oversold. If buyers are able to get back into control near 5, 141, or 20-day SMA, a recovery rally could reach 5, 342, which is a major retracement level of the overall swing range. A strong breakout above that resistance would increase the bulls confidence and open the way to 5, 420 and possibly new highs. On the other hand, if the price does not manage to stay above the Fibonacci support, the attention could be turned to 5, 000 and then perhaps to the 4, 9504, 900 range if the dollar strength is getting a faster pace. Generally, even though Gold is showing weakness in the very short term, technically, the scene is still mainly bullish. The prolonged bullish scenario is kept in place by the markets demand for safe havens due to trade war uncertainties, geopolitical conflicts, and the expected looser monetary policy.
