The tragic news of the Iranian President Ebrahim Raisi’s death in a helicopter crash near the border with Azerbaijan sent shockwaves through the financial markets. Alongside the President, the helicopter also carried Foreign Minister Hossein Amir-Abdollahian and other officials, all of whom perished in the crash. As the search for the helicopter unfolded in the inaccessible mountainous region, the price of gold saw a significant increase. Reports from Yahoo Finance indicate that the gold rally was primarily driven by uncertainty surrounding the situation in Iran. The XAU/USD chart shows that the price of gold reached an all-time high of $2450 at the peak of the day following the news.
Prior to the tragic event, there were already indications that the $2400 level could pose significant resistance for the price of gold. Despite an initial correction to the $2380 level, today’s gold price can be viewed as a second attempt to break through the $2400 level. Taking into account the new data, several factors stand out in the technical analysis of the gold price:
– The long-term ascending blue channel remains relevant, with the price nearing its upper boundary.
– The price is in proximity to the median of the ascending black channel, which is exhibiting signs of resistance.
– A bearish divergence is starting to form on the RSI indicator.
– Following a historical peak, the gold price has started to decline, potentially influenced by an official statement from Israel denying involvement in the crash.
In light of the recent developments and the lack of a commensurate rise in the XBR/USD oil price, indicating subdued fears of escalation in the Middle East, a correction on the XAU/USD chart is anticipated. This correction could potentially see the price retreat to the lower boundary of the short-term channel, as depicted in black. Should this scenario unfold, bears may encounter the $2400 level now serving as a significant support level.
The tragic event involving the Iranian President has had a noticeable impact on the gold market, with uncertainty driving prices to historic highs. However, technical analysis suggests a potential correction in the near future, as geopolitical tensions ease and market dynamics shift. Traders are advised to stay vigilant and consider the evolving situation carefully when making investment decisions.