Gold has turned bullish once again after climbing above the $1920 level. This comes at a time when Credit Suisse has come under the spotlight amid financial troubles.
In fact, this has raised fears of a full-fledged financial crisis in the European region. That's why investors are now seeking refuge in safe-haven assets such as Gold and the Japanese Yen.
On the other hand, the US 10-year bonds are down by 6% after the collapse of US banks and the recent turmoil surrounding Credit Suisse.
All of these factors are collectively fueling the bullish trend in Gold and could even push the yellow metal above $2000 as well.
On the technical front, there's a chance that XAU/USD might be making a double-top formation. The daily chart shows that $1960 is an important resistance, and if we get rejection here, it will start to look like a double top.
But to add more credibility to this bearish pattern, the XAU/USD will have to break the neckline near the $1810 - $1800 region. This area is also strong support as well and a bounce from here will lead to sideway movement in Gold.
On the upside, the important resistance levels are present at $2000, $2050, and $2080. Considering the current situation of XAU/USD, the $1960 level is situated ahead of the $2000.
However, we can't ignore the fact that the fundamental setup is now supporting bullish Gold. If the current banking crisis in the USA and Europe turns worse, it will stop the central banks from raising rates.
And we all know that high-interest rates support the fiat currencies and make the cash flow out of non-yielding assets such as Gold.
But it would be getting ahead of ourselves to say that a major banking crisis is ahead of us. After all, Credit Suisse has a good reputation and could bounce back from the current turmoil.
So far, the technical as well as the fundamental front is supporting a bullish Gold rather than a bearish one!