Gold prices briefly traded above $2000 on Monday but quickly turned around and closed below the key level before falling back to $1935.
However the continued turmoil in banks and the belief that the Federal Reserve will have to cut rates this year has given another lift to gold. It's up $28 today to $1998 in what would be the highest close in a year.
The $2000 level has proven to be problematic for gold in the past as it closed above it last March for one day early in the Ukraine war before reversing and falling to $1625 by September. In the big picture, this is the third big test of $2000 this cycle and the old technical saying goes that if you keep on knocking, eventually they let you in.
Seasonally though, gold is at an ebb and that argues for some caution. At the same time, there's mounting evidence that sovereigns are buying gold in what could be an unstoppable force. The growing alliance between Russia, China and the middle eastern states is an argument for all of them to ditch US dollar reserves in favor of precious metals. A premature central bank pivot would also raise questions about the willingness to fight inflation and that would be a powerful signal for gold.
For now, I don't see the risk-reward proposition for gold longs but its resilience this week on days where banking fears had calmed is encouraging.
