The trade: will gold maintain its safe-haven status amid global market volatility?

US Tech 100 and Australia 200 navigate market volatility

The US Tech 100 has experienced significant volatility, slumping 4% on Monday before staging a modest recovery. This decline reflects broader concerns about technology valuations and US tech dominance being challenged globally. Tesla has been particularly affected, with its share price down approximately 55% alongside other artificial intelligence (AI) technology stocks.

The emergence of DeepSeek in late January and Alibaba's recent AI model announcement have contributed to questioning US technological supremacy, eroding previous share price gains. From a technical perspective, the index has broken below its 200-day moving average (MA) and important uptrend support dating back to December 2022. Current market conditions suggest potential for short-term bounces, but the prevailing strategy appears to favor selling rallies rather than buying dips.

The Australia 200 has similarly broken through multiple critical support levels, including the psychologically important 8000 mark. The index has fallen through its 200-day MA, multi-month trendline support, and psychological support levels with remarkable speed. At its recent low, the index dropped to approximately 7770, representing a decline of nearly 9.85% from its Valentine's Day high of 8615. This correction has erased about 270 billion Australian dollars worth of market capitalization.

Looking ahead, the index may experience a short-covering rally, but the prevailing uncertainty suggests selling bounces rather than buying dips remains the preferred approach. This outlook would shift if the index reaches the 7600 area or recovers above the trend channel support around 8200.

Australian dollar shows resilience despite market turmoil

The Australian dollar (AUD) has displayed unexpected strength, benefiting from declining appetite for US dollar exposure – a complete reversal from sentiment at the start of the year. Technical analysis suggests a potential low around 0.6087, with room for a rebound towards 0.6450, possibly extending to 0.65.

A move above the 200-day moving average could potentially signal the end of the bear market for the Australian dollar, though confirmation of this trend change remains pending. Traders should monitor this level closely as it could indicate a significant shift in the currency's trajectory.

Market assets responding to global uncertainty

• Gold maintains crucial position

Gold currently sits at an interesting technical juncture, caught between broad risk reduction pressures and continued safe-haven demand. The precious metal trades in the middle of a multi-month parallel uptrend with wide parameters – the top band around 3025 and the bottom near 2750.

With gold positioned mid-range, caution is warranted when establishing new positions given current market volatility. Lower price levels may present more favorable entry points for investors looking to add gold exposure to their portfolios.

• Bitcoin tests key support levels

Bitcoin has experienced heightened volatility after reaching highs above 83000. Recent trading patterns suggest the cryptocurrency has run out of immediate catalysts for further gains, with post-US election factors creating headwinds rather than tailwinds.

Technical analysis indicates a pullback to the 75,000 - 65,000 support area was likely, with the cryptocurrency now reaching the upper bound of that zone. A bullish reversal candle has formed, suggesting potential stabilization. However, Bitcoin would need to regain the 84,000 level – approximately its 200-day moving average – to signal the correction might be complete. If this level is reclaimed, the outlook for Bitcoin could turn more positive in the weeks ahead.