Gold is going through a bumpy ride in the current week, with a sudden change of mood being displayed in every single day for the past 4 trading sessions.

The latest movement was lopsided in favour of the bulls, which was supported by technically based buying interest yesterday and continued today 19th of April.

A number of reasons due to this unorthodox stance can be listed with the most popular news out, at the top of the list.

The Syrian Issue remains on hold after last weekend’s US airstrike attacks took place on specific chemical sites.

For now, the incident is kept on a low from all ends including US, Russia, Iran and the Syrian Government, but this may be creating even further uncertainty as possible future escalations remain to be seen.

This uncertainty is what the precious metal feeds on and utilizes, to unleash strong upward movements as seen in the past 3 days.

Haven demand is very obvious especially when the shiny metal is trading above the $1,350 psychological price.

It is our opinion that the matter will re-surface and captivate the attention as well as the financial markets trading activity.

The relationships between the countries involved has not been cleared yet and there is no guarantee or agreement in place in order to understand which way the situation is heading, indicating that the bulls in the gold market could be anticipating to be set free and boost prices even higher.

In contrast, if the situation is to calm down then gold could drop as fast as it advanced and profit taking could be seen.

On another note, the dollar index an indicative instrument of the greenbacks strength against a basket of currencies, dropped to a three-week low on Tuesday.

When other currencies are gaining strength, the demand for gold increases as it becomes cheaper and so the bullion’s prices are boosted.

The bullion has been moving between the $1,330 and $1,350 prices very easily and is comfortable of gaining and dropping between those levels.

If gold has the strength to remain above the $1,350 level for a couple of days it could be indicating a new positive sentiment on the purchasing side.

Add another point, the stock market is currently showing more volatility as the period of Earnings releases is getting most of the attention.

Stocks are very volatile on normal trading hours but also on after markets hours as well.

This fact could be holding back the precious metals volatility for now and the coming week.

Market participants and especially risk averse individuals see the stock market as a more interesting and fascinating sector at the moment and money could be moved from other industries and thrown into the stock market.

Golds demand could weaken considerably, and the sudden bearish movement seen of Tuesday’s European morning could be a consequence of that logic.

As a conclusion, the unresolved geopolitical issues could be a critical factor towards how high gold could advance.

In the long term, should there be aggressive actions taken in Syria, or should there be a possible US Fed rate hike, gold could jump to $1,400 in a matter of a week’s trading and stabilize above $1,370 after that.

Technical Analysis on Gold market

Currently, Gold is trading around $1,348 per ounce.

Gold must stabilize above $1,350 in order for us to consider it as an advancement and that a bullish sentiment has overtaken the market.

Please note the bullion has strong resistance at $1,352.50.

If the bulls take the reins and break above the $1,352.50 (R1) resistance level there could be heading towards the $1,355.77 (R2) resistance hurdle.

Any sudden aggressive action on Syria could support this scenario.

If the precious metal is overtaken by a bearish movement we could see it aiming towards the $1,339.62 (S1) support level and even breaching it.

Our own view is that Gold will continue to trade in a sideways manner between the $1,339.62 (S1) support barrier and the $1,352.50 (R1) resistance level.

This scenario could be supported by the increased interest in the stock market volatility currently.