Gold bulls cling to 2310, facing more selling in the future?

due toGold investmentPeople are concerned about easing tensions in the Middle East, and there are indications thatFederal ReserveHigher interest rates will be maintained for a longer period of time, Tuesday (April 23).Gold priceAfter recording the largest one-day decline in nearly two years, it continued to decline.

(Spot gold 1-hour chart)

Ole Hansen, head of commodity strategy at Daocheng Technology, said: "Gold's substantial rally since its mid-February lows is now being challenged by a relatively aggressive but healthy correction that is long overdue."

Gold fell 2.7 percent on Monday, its biggest intraday drop in 22 months. The March-April rally pushed the precious metal up nearly $400 to a record high of $2431.29 on April 12.

Mr. Hansen said the adjustment "will help determine the actual level of underlying demand in addition to momentum and managed money accounts... and will reduce long positions if technical and/or fundamentals change".

"Given the recent surge in gold prices, there may be some tactical selling shorts," Richard Grace, senior currency analyst and international economist at ITC Markets, said in a note.

Since mid-February, gold prices have still rallied about 15 percent, and the precious metal has rallied despite signs that the Federal Reserve will delay its much-anticipated pivot to policy, with both the dollar and Treasury yields rising.

The two key components of gold demand - central bank purchases and physical demand from eastern powers - remain strong and continue to support the precious metal.

Another supportive factor, according to the World Gold Council, was that global physically backed gold exchange traded funds last week recorded their first weekly net inflows since the end of 2023, as higher holdings in North America and Asia offset outflows from Europe.

Traders are now turning their attention to US economic data this week, including the Federal Reserve's preferred inflation gauge, which could provide more clues to the path of monetary policy. Policymakers have become increasingly hawkish on the outlook for interest rates in recent weeks following a series of strong inflation reports.

As the market continues to temper expectations of monetary easing this year, a prolonged period of higher interest rates could weigh on interest-free gold.

Gold market technical analysis

Christopher Lewis, senior financial analyst at FXEmpire, wrote that the gold market fell again on Tuesday morning and quickly tested the $2,300 level that day. That being said, I think the market will eventually move lower, possibly to the 50-day moving average. After that, we will see $2,200.

So, having said that, it does suggest that a little selling pressure is likely to be seen. Part of the reason is that geopolitical concerns have eased somewhat, and even the Iranians say Israel has received an appropriate response. So, if that is indeed the case, that part will indeed be left out of the decision-making.

That doesn't mean gold is going to start crashing or the trend is over. It means we may have an opportunity to buy it at a lower price. The 50-day moving average, the $2200 level, I think if we can do that, both of those points would be excellent entry points. But what I'm going to do is wait for signs of an impulsive rally.

Beijing time 23:52, spot gold reported 2321.79 dollars/ounce, down 0.23%.