Gold Price Forecast: Ukraine in the eye of the storm, fears boost safe-haven assets
XAU/USD Current price: $1,902.05
- Russian President Putin to deploy armed forces in Donbass to “protect” people.
- Market players ignored upbeat US businesses data and Consumer Confidence.
- XAU/USD is poised to extend gains amid a risk-averse environment.
Spot gold trades in the red on a daily basis at around $1,902.00 a troy ounce, retreating from a fresh multi-month high of 1,914.10. The bright metal gapped higher with Asian markets’ opening, as the decision of Russian President Vladimir Putin to declare the independence of two Republics in the Donbass region, Donetsk and Luhansk. The EU has responded with sanctions while the White House said Russian moves on Ukraine an invasion, which sets the stage for strong sanctions to be imposed on Moscow.
Gold pulled back from the mentioned high as the market’s sentiment improved during London trading hours, sending XAU/USD down to 1,891.36. However, the market mood soured again after the US opening, after the Russian Upper House of Parliament voted in favour of giving Putin the formal authority to deploy Russia's armed forces abroad to “protect” people. The news has sent Wall Street into the red after a positive start to the day.
Speculative interest ignored macroeconomic releases, but US data was generally encouraging. Markit published February flash PMIs, which showed a wider than anticipated expansion in both the services and the manufacturing sectors. Additionally, CB Consumer Confidence printed at 110.5 in February, down from the previous 111.1 but better than the 109.9 expected.
Gold price short-term technical outlook
The XAU/USD pair has posted a higher high for a fourth consecutive day, while it also posted a lower low, which means that the bullish potential remains strong. Technical readings in the daily chart reflect bulls’ dominance, as technical indicators keep consolidating within overbought levels as the price develops far above all of its moving averages.
The 4-hour chart shows that technical indicators bounced after nearing their midlines, heading higher within positive levels although with uneven strength. Additionally, gold quickly recovered after briefly piercing a bullish 20 SMA, which advances above the longer ones. A steeper advance could be expected on a break above 1,916.50, June 2021 monthly high, and the immediate resistance level.
Support levels: 1,887.60 1,877.20 1,865.10
Resistance levels: 1,916.50 1,923.70 1,934.70
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Author
Valeria Bednarik
FXStreet
Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.
