The upward momentum of precious metals takes place in the context of investors continuing to seek safe haven assets.
David Morrison, senior market analyst at Trade Nation - said that gold surpassing the strong resistance zone is a noteworthy technical signal, but the upward trend needs to be confirmed by the ability to maintain stability above this level.
Momentum indicators such as MACD are gradually improving. Overcoming 5,100 USD/ounce shows that the buying force is strong enough to break the previous sideways state. However, the market may still experience fluctuations when investors take short-term profits" - Morrison said.
According to analysts, the 5,100 USD/ounce mark - once an important resistance - may now become a near support zone, playing a "backing point" for the price trend in the short term.
Lukman Otunuga - senior analyst at FXTM - assessed that geopolitical factors continue to contribute to supporting gold prices.
Cautious sentiment is increasing in the face of new tensions in the Middle East. As risks of instability remain, safe-haven demand may continue to support gold," he said.
According to Otunuga, if gold holds steady above 5,100 USD/ounce, the price may expand its upward momentum to higher areas. Conversely, if it loses this mark, the possibility of technical adjustment to the 5,000 USD/ounce area is entirely possible.
Meanwhile, Alex Kuptsikevich - chief analyst at FxPro, said that the development of exceeding 5,100 USD/ounce is of important psychological significance to the market.
The bottom chain higher than the previous bottom formed from the beginning of February has taken effect. Breaking the resistance shows that buyers are dominating. However, it is necessary to monitor price reactions in the next few sessions to assess the sustainability of the trend" - Kuptsikevich commented.
This expert also noted that selling pressure may increase in high price zones, especially when the market enters a overbought state.
US economic data is still the main variable
Besides technical factors, the gold market this week is affected by some important US economic reports.
Notably, the Consumer Confidence Index, the number of weekly jobless claims and the Producer Price Index (PPI) report. These data are considered important clues for investors to assess the inflation outlook and monetary policy orientation of the Fed.
Experts believe that if inflationary pressure remains high, interest rate expectations may fluctuate, leading to significant changes in the gold market.
Expectations of demand from Asia
The return of the Chinese market to trading after the Tet holiday is also expected to contribute to boosting physical gold demand, especially in the context of prices being at a historical high.
In the short term, analysts predict that gold may continue to fluctuate strongly around the 5,100 USD/ounce zone, as the market balances between safe-haven buying pressure and profit-taking pressure. The next trend will depend on cash flow and new signals from the global macroeconomy.
