Following an impressive rally to its highest level since September 2020 at $1,974 on Thursday, gold declined below $1,900 on Friday and ended up snapping a three-week winning streak. The yellow metal is set to continue its move higher on protracted tensions in Ukraine, FXStreet’s Eren Sengezer reports.
Technical outlook remains bullish as long as $1,870 support holds
“In case Russia reaffirms its intention to look for a diplomatic solution and refrains from advancing its troops early next week, gold is likely to face additional selling pressure. On the flip side, a prolonged military conflict with Russia’s intention to take over Kyiv and additional sanctions from the west could support the precious metal.”
“FOMC Chairman Jerome Powell will testify before the US Senate Banking Committee. If the chairman hints at the possibility of a 50 basis points rate hike in March, gold could start pushing lower. On the flip side, markets are currently pricing a very small chance of a double-dose hike in March and a dollar selloff should be limited in case Powell goes against it.”
“The initial support is located at $1,870 (static level, ascending trend line). In case XAU/USD makes a daily close below that level it could extend its slide toward $1,850 (static level, 20-day SMA).”
“On the upside, $1,900 (psychological level) aligns as first resistance. If buyers managed to flip that level into support, $1,910 (static level) could be seen as the next hurdle before $1,920 (static level).”