Gold seesaws around $1,980.00 mid-US session, as the volatility witnessed at the weekly opening eased. Gold Price soared to $2,002.64 a troy ounce, its highest since August 2020 amid a risk-averse environment, later plummeting to $1,960.95 ahead of Wall Street’s opening. On a daily basis, XAUUSD has posed a higher high and a higher low, which maintains the risk skewed to the upside despite the latest pullback. Further supporting the bullish case, Gold Price holds above Friday’s close at $1,970.62  a troy ounce.

US indexes trade with substantial losses, reflecting the dismal market’s mood, with all major indexes down over 1%, somehow providing support to the bright metal. An escalation of the Russia-Ukraine crisis will likely trigger another round of gold buying, with the metal poised to rally towards $2,075, where it topped in August 2020, and beyond, with $2,100 now on the table. 

Meanwhile, demand for government bonds has pushed yields towards the lower end of their yearly range. The 10-year Treasury note currently yields 1.75%, far below the over 2% reached mid-February. The focus remains on the Russia-Ukraine war, and soaring commodities prices and their possible effects on already soaring global inflation. In this scenario, Gold Price is poised to maintain the bullish momentum and could retest its all-time high at around $2,075 a troy ounce.

Previous update: Given the recent strong bullish run, slightly overbought conditions on short-term charts prompted traders to take some profit off their bullish positioning around Gold Price. Apart from this, a blowout US dollar rally was seen as another factor that acted as a headwind for the dollar-denominated commodity. That said, the downside remains cushioned amid worries about the potential economic fallout from a further escalation of the Russia-Ukraine war. The fundamental backdrop remains tilted firmly in favour of bullish traders and supports prospects for further gains. Hence, any meaningful pullback might still be seen as a buying opportunity for XAUUSD and is more likely to remain limited amid absent relevant market moving economic releases.

Read more: US Dollar Index Price Analysis: Immediately to the upside comes 100.00

Gold News: The latest on the Russia-Ukraine war

In the second round of peace talks last week, representatives from Kyiv and Moscow agreed on the creation of safe corridors, to evacuate civilians from some cities under attack. There are some places in critical situations, such as the port city of Mariupol, running for the sixth consecutive day without water or power.

No corridor was opened through the weekend amid Russian continued shelling on the region. On Monday, Moscow announced it would open evacuation corridors, although all the routes offered end in Russia or Belarus. 

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.”

Earlier on the day, 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.”

XAUUSD technical analysis

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

Gold Price chart

Trend: Further upside expected

This article was originally published by the original article here.


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