The Gold Spot price (XAUUSD) surged to the highs of the second quarter of 2022 on the back of safe-haven demand brought about by the collapse of large banks in the U.S. and Europe. Signals from the Federal Reserve of a rate hike pause in the near future also bolstered the spot price. So far, the non-yielding metal has gained 2.50% from the week’s lows as safe-haven demand drove prices.
Traders will be weary of the downside as the banking sector crisis is not yet entirely in the clear. If additional risks abound from the sector, safe-haven demand for Gold will likely drive the spot price above its one-year peak.
Technical
The Gold spot price surged on strong bullish momentum and well above the 100-day moving average. Support and resistance were formed at the 1938.99 and 1997.63 levels, respectively.
Price approached resistance on declining volumes, forming a consolidation in a descending triangle pattern. The consolidation is probably the beginning of the weakening of bullish momentum. A reversal is probable if price action breaks below the support of the descending triangle pattern with high volumes. Bears will likely look to the 1938.99 level with interest.
Alternatively, a high volume break out above the 1997.63 level could signal an appetite for the upside, with bulls likely aiming for the 2016.08 level, based on the 23.6% Fibonacci Extension level.
![](https://blog.trive.com/wp-content/uploads/2023/03/XAUUSD_2023-03-24_09-00-34_d922c-1024x506.png)
Summary
Despite the U.S. Federal Reserve raising rates by 25 basis points, the Gold spot price withstood its ground as a safe-haven asset amid the banking sector crisis. Traders will likely be poised to let the descending triangle pattern unfold. A breakout to the upside or downside could leave the 2016.08 and 1938.99 levels as the most probable, respectively.
Sources: Reuters, TradingView