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>>Gold Pulls Back from Its Monthly High as the Dollar Gains Slightly: An In-Depth Look at Market Resilience

Gold Pulls Back from Its Monthly High as the Dollar Gains Slightly: An In-Depth Look at Market Resilience

crypthub

about 8 hours ago

Market Context

Gold fell 1.8% to $2,145/oz on March 10, retreating from a $2,185 peak reached three sessions earlier. The drop coincided with a 0.6% rise in the US Dollar Index, reinforcing the inverse gold‑dollar relationship. Federal Reserve testimony and divergent ECB policy expectations bolstered dollar strength, while profit‑taking and an overbought RSI signaled short‑term consolidation. Despite the pullback, central banks bought 48 t of gold in January, keeping demand robust.

Technical Landscape

Gold trades inside an ascending channel that began late 2023, with the recent peak testing the channel ceiling. Immediate support lies at the 50‑day moving average ($2,085) and stronger long‑term support at the 200‑day average ($2,025). A potential double‑top near $2,185 suggests near‑term resistance, yet weekly charts still show higher highs since November 2024. Selling volume during the retreat was below average, indicating limited bearish pressure.

Demand Drivers

Physical demand stays strong; central‑bank purchases and a 42 t rise in gold‑ETF holdings in February offset recent outflows. Ongoing geopolitical tensions and upcoming elections continue to boost safe‑haven appeal. Global mining output fell 2.3% YoY in Q4 2024, tightening supply and supporting prices. The gold‑to‑silver ratio dropped to 85:1, reflecting broad precious‑metal strength.

Outlook

Analysts expect the correction to stay within a normal range, with key support around $2,025‑$2,000. Future price moves will hinge on Fed policy, inflation data, and any escalation in geopolitical risk. Seasonal demand in Q2, especially from India, could provide additional floor support. The current level offers a potential entry point for investors seeking exposure amid ongoing monetary‑policy divergence.