Gold Price Analysis: XAU/USD bulls eye test of Q4 2021 highs in $1877s on tense geopolitical backdrop

Spot gold is consolidating in the $1850-60 area after hitting fresh multi-month highs last Friday on geopolitical tensions.
As concern about a potential Russian incursion into Ukraine mounts, risks seem tilted to the upside for gold.
Technical developments also lean bullish after XAU/USD broke above a long-term pennant last week.

Joel Frank Independent Analyst

Having hit multi-month highs in the $1860s last Friday amid rising geopolitical concerns (as Russian military action against Ukraine, perhaps as soon this week, looks ever more likely) spot gold (XAU/USD) prices have been stabilising in an $1850-60 range. Russia/Ukraine/NATO tensions will be the main driver of market sentiment this week, meaning gold traders will be closely keeping an eye on meetings between Russian and Western politicians over the next two days. The most important of these meetings is a visit by German Chancellor Olaf Scholz to Kiev on Monday and then to Moscow on Tuesday. With US press suggesting that Russian could launch an assault as soon as the middle of the week, and Western leaders warning a Russian attack could come at any time, this meeting may be the last-ditch attempt to prevent war.

Recent news that, in a meeting with Russian President Vladimir Putin, Russian Foreign Minister Sergey Lavrov recommended sticking with the diplomatic path for now, saw gold prices chop within intra-day ranges and did not result in lasting downside. That suggests that risks remain tilted to the upside this week. In the event that diplomacy fails and war does break out, an associated safe-haven bid could easily send XAU/USD towards November’s highs in the $1870s, with a break above that opening the door to a run at the $1900 level. Importantly for the gold bulls, recent technical developments also suggest a bullish bias. Looking at XAU/USD over the past year and a bit, the pair formed a long-term pennant structure. Last Friday, it appeared to break to the upside of this structure, suggesting an extension of upside in the near term.

Aside from geopolitical risks, gold traders will also be keeping an eye on US economic and Federal Reserve developments. January Producer Price Inflation figures are scheduled for release on Tuesday ahead of January Retail Sales and the release of the accounts from the January Fed meeting on Wednesday. Regional Fed Manufacturing surveys for the month of February and a barrage of Fed speak, starting with outspoken hawk James Bullard at 1330GMT on CNBC on Monday, will also be worth keeping an eye on.

XAU/Usd

Overview
Today last price	1852.7
Today Daily Change	-8.53
Today Daily Change %	-0.46
Today daily open	1861.23

Trends
Daily SMA20	1821.41
Daily SMA50	1808.78
Daily SMA100	1800.46
Daily SMA200	1807.18

Levels
Previous Daily High	1865.51
Previous Daily Low	1820.98
Previous Weekly High	1865.51
Previous Weekly Low	1806.9
Previous Monthly High	1853.91
Previous Monthly Low	1780.32
Daily Fibonacci 38.2%	1848.5
Daily Fibonacci 61.8%	1837.99
Daily Pivot Point S1	1832.97
Daily Pivot Point S2	1804.71
Daily Pivot Point S3	1788.44
Daily Pivot Point R1	1877.5
Daily Pivot Point R2	1893.77
Daily Pivot Point R3	1922.03

Author

Joel Frank

Independent Analyst

Joel Frank is an economics graduate from the University of Birmingham and has worked as a full-time financial market analyst since 2018, specialising in the coverage of how developments in the global economy impact financial asset

AUD/USD eyes 100-SMA hurdle near 0.7035 as hawkish RBA counters firmer USD

AUD/USD regains positive traction on Tuesday and climbs to 0.7030 during the Asian session, reversing the previous day's corrective slide from a one-month high as hawkish RBA rate expectations continue to support the Aussie. Spot prices, however, remain below the 100-day SMA pivotal resistance amid a firmer US Dollar as traders brace for Australia’s September CPI report on Wednesday ahead of the Fed rate decision.

USD/JPY sticks to modest gains above 157.50 as traders await Fed, BoJ meetings

USD/JPY attracts buyers for the third straight day, recovering further from a one-month low ahead of Wednesday’s FOMC decision and the BoJ policy update on Friday. Meanwhile, expectations that the BoJ may hold off on aggressive rate hikes weigh on the Japanese Yen, and the US Dollar advances to a nearly two-week high, supporting the currency pair.

Gold bears flirt with $4,000 amid sustained USD buying ahead of FOMC decision

Gold meets with a fresh supply during the Asian session, stalling the previous day's modest bounce from the vicinity of a three-month low amid a firmer US Dollar. The precious metal, however, defends the $4,000 psychological mark as traders now seem hesitant and opt to wait for the outcome of the two-day FOMC policy meeting on Wednesday.

Pi Network stalls as weak crypto sentiment caps recovery

Pi Network (PI) holds steady above $0.0760 at press time on Tuesday, stalling after a roughly 2% rebound the previous day. The broader market's weak sentiment and reduced trading volume weigh on the PI token. The technical outlook is bearish, with price capped below a long-term resistance trendline and weak momentum.

France tests the Euro's nerve: What the OAT spread is telling FX traders

France's 10-year borrowing premium over Germany hit its widest since the 2011 debt crisis last week. With public spending above 57% of GDP, unrest on the streets and a presidential election next spring, cuts look unlikely. If Paris cannot trim, the bill may be paid quietly through financial repression.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.