- Gold buyers keep reins around August 2020 levels, posted the biggest weekly jump since July 2021 at the latest.
- US braces for Russian oil import ban even without allies, UK Defense Chief hints at further violence in Kyiv.
- US inflation data will be crucial this week as upbeat jobs report helped Fed hawks to roar before the silent period.
- Gold powers towards record high, NEM closed last gap, what’s ahead?
Despite recently easing from the $2,000 threshold, gold (XAU/USD) prices remain on the front foot around a 19-month high as traders seek risk-safety amid the ongoing Russia-Ukraine jitters. That said, the quote eases to $1,988, up 1.0% on a day, while heading into Monday’s European session.
The yellow metal refreshed multi-day high earlier in Asia as risk-off escalated on the weekend news suggesting Russia’s intensified military invasion of Ukraine. On the same line were comments from the West suggesting an oil import ban from Russia. Further, UK Defense Chief Admiral Sir Tony Radakin also signaled further casualties in Kyiv as he believed, per The Times, “Russia could ‘turn up the violence’ with ‘more indiscriminate killing and more indiscriminate violence’ in response to resistance.”
Recently, Bloomberg said that the US weighs acting without allies on the ban of Russian oil imports.
While portraying the risk-off mood, S&P 500 Futures drop 1.30% whereas the US 10-year Treasury yields fall 2.5 basis points (bps) to 1.69% to portray the heavy risk-off mood.
It’s worth noting that Russia’s stand as the world’s third-biggest oil producer adds to the global supply crunch and strengthens commodities additionally.
As a result, gold buyers are likely to keep reins but the pullback moves can’t be ruled out should this week’s US inflation figures favor the faster Fed rate-hikes. That said, the US Nonfarm Payrolls (NFP) rose by 678K, well above the median forecast of a 400K figure and upwardly revised 484K prior during February. On the same line, the Unemployment Rate dropped to 3.8% versus 4.0% previous readings and 3.9% expected during the aforementioned month. Following the data release, Chicago Fed President and FOMC member Charles Evans mentioned, per Reuters, “The US central bank is on track to raising rates this year, though it may be ‘more than I think is essential to do so at every policy-setting meeting.”
Gold prices justify the latest bearish Doji on the four-hour chart while retreating from multi-day high amid overbought RSI conditions.
However, pullback moves remain elusive until the quote defies the last week’s triangle breakout, by declining below the previous resistance line of $1,928.
Ahead of that, February’s peak of $1,967 may also challenge the XAU/USD pullback.
In a case where gold prices drop below $1,928, the $1,900 threshold and an ascending support line from late January near $1,890 will test bears before giving them controls. Also acting as a downside filter is the 200-SMA level of $1,860.
Alternatively, the 61.8% Fibonacci Expansion (FE) of January-February moves, near the $2,000 psychological magnet, tests the metal’s immediate upside ahead of the theoretical target of the last week’s triangle breakout near $2,030. Following that, the August 2020 peak near $2,077 will be in focus.
Gold: Four-hour chart
Trend: Further upside expected