Gold drops back at the start of the week

 NEW YORK (Mar 14)  Gold is having a retracement at the start of the week. the price is around 1% lower in early European trading and has subsequently pushed through the $2K/oz psychological support. The 4-hour chart below shows the price has moved through the support which was the previous wave high from 24th February (marked in red). The next support is now at the pink upward sloping trendline which the price has bounced off on three occasions. Elsewhere on the downside, the orange support line at $1919/oz would be next up.

The bulls are still firmly in charge of this market as the price waves are still making higher highs and higher lows. If the bulls are to come back into the market this week, the $2000/oz level is the one to watch. If there is to be a price break at that level then the all-time high could be the next target. There is the black trendline resistance in the way that could be a sticky point. This also confluences with the volume point of control from the volume profile indicator on the right-hand side of the chart.

On the fundamental front, there are talks between Ukraine and Russia today. Also, the U.S. and China are also having high-level talks regarding the conflict. This makes much of the price action sensitive to headlines. For the rest of the week, the Fed meeting is also coming up. Money markets are pricing in a 25bps hike but the question remains if the hike will be a "dovish hike". Markets are in turmoil due to the war in Ukraine and this could sway the Fed to be more dovish than anticipated. 

KITCO