Gold Drops Nearly 3% Amid Market Volatility

Gold fell nearly 3% on Monday, primarily due to increased market volatility as traders liquidated profitable positions in gold to cover margin call shortages from losses in the stock markets.

Despite today’s significant drop, which marks the biggest daily loss in two months, there is no reason for panic. Instead, these dips are expected to present better buying opportunities.

In the near term, the price remains within the range of the past couple of weeks and is far from key supports at the $2290 zone, indicating that the larger bullish trend remains intact and current weakness is seen as temporary and limited.

Rising geopolitical tensions and fresh signs of a potential recession in the US keep markets highly alert for a stronger move into safety should conditions deteriorate further. Consequently, gold hasn’t lost much of its safe-haven appeal and is currently positioning for a final push through $2500, with a potential target at the psychological $3000 barrier.

Initial support at $2366 (55 DMA / 61.8% Fibonacci retracement of the $2293 to $2483 uptrend) has provided a temporary floor for today’s drop, guarding the $2238 (100 DMA / 76.4% Fibonacci retracement) and key $2300/$2290 zone.

A return and close above the $2400/10 zone would ease downside pressure and brighten the near-term outlook.

Res: 2462; 2474; 2483; 2500
Sup: 2430; 2410; 2400; 2376