Gold opened Monday’s trading on a notable increase of 2.2%, heading towards a fourth consecutive session of gains, trading near its highest levels in a month near $5400 per ounce.
Gold is currently trading near the second weekly resistance level of $5405. It should be noted that surpassing this level could help prices resume their upward trend, which could extend towards the third weekly resistance level of $5515.
If gold fails to break through the second weekly resistance level of $5405, it may test the bullish channel’s middle line, where breaking it would be a negative signal that could pave the way for a retreat towards support levels of $5154 then $5029.
In terms of geopolitical escalation, on Saturday, the U.S. and Israel announced joint strikes on sites across Iran, which resulted in the killing of several high-ranking Iranian personnel, including Supreme Leader Ayatollah Ali Khamenei.
Uncertainty has particularly surrounded how long Washington plans to remain involved in the conflict, Trump told the New York Times that the assault could be sustained for “four to five weeks.” He also declined to provide specific details on how he foresees a transition in Iran transpiring, saying he has “three very good choices” but “won’t be revealing them now,” the New York Times reported.
In the same context, all eyes were on the Strait of Hormuz, through which around a fifth of the world’s seaborne oil trade flows and 20% of its liquefied natural gas. While the vital waterway has not yet been blocked, marine tracking sites showed tankers piling up on either side of the strait, wary of attack or maybe unable to get insurance for the voyage.
From a fundamental perspective, markets are gearing up for key U.S. data releases this week, with primary focus on Friday’s monthly employment report.
The U.S. economy may have added 58,000 jobs in February, down from a job-gain of 130,000 January, economists have predicted. Meanwhile, the unemployment rate is tipped to remain unchanged at 4.3%.
Finally, markets will also pay close attention to the U.S. service and manufacturing PMI reports for February.