Gold has benefitted from the classic risk-off moves in global markets this week. Investors shied away from stocks and sought refuge in US Treasuries, pushing yields and the US dollar off recent heights. Such a combo is paving the way for spot gold to end a run of four consecutive weekly declines and resurface above its 200-day moving average.
Gold’s stature as a safe haven could return to the fore if the greenback falls further on rising worries over a US recession.
However, gold bugs will be wary of the Fed’s dogged resolve to combat inflation with even more rate hikes, threatening to send Treasury yields even higher.
From a technical perspective, gold bulls will have to secure a convincing breakout beyond January’s high of $1853 as well as November’s $1877 peak in order to launch a bid to reclaim the $1900 handle.