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 keeps range near mid-0.7100s as USD bulls await US CPI

AUD/USD steadies near mid-0.7100s in the Asian session on Friday, stalling the previous day's sharp decline to an over one-week low. The August PPI report reaffirmed Fed rate-hike bets and boosted the US Dollar on Thursday, which weighed heavily on the pair. However, hawkish RBA expectations limited losses for the Aussie as USD bulls now await the release of the US consumer inflation figures before placing fresh bets.

USD/JPY holds lower ground toward 154.00; looks to US CPI

USD/JPY holds lower ground toward 154.00 in the Asian session on Friday after hot Japanese PPI data bolster a more hawkish BoJ repricing and provide fresh impetus to the Japanese Yen. However, the downside appears capped as the US Dollar preserves overnight gains ahead of the latest US consumer inflation data.

Gold moves away from one-week low, climbs above $4,450 as USD edges lower ahead of CPI

Gold builds on its modest intraday recovery from the $4,300 neighborhood, or a one-and-a-half-week low, touched earlier this Friday, and climbs above $4,350 heading into the European session. The upside potential, however, seems limited as traders opt to wait for the release of US consumer inflation figures before placing directional bets.

Cardano approaches critical support as correction risks grow

Cardano (ADA) recovers slightly, trading at $0.206 at the time of writing on Friday, inches above the critical support zone after losing more than 6% so far this week. Weakening derivatives data and fading bullish momentum suggest a bearish near-term outlook, with a decisive close below the support zone potentially triggering a deeper correction for ADA.

US core CPI data set to ease in August as markets reprice Fed September rate decision

The US Bureau of Labor Statistics will publish the August Consumer Price Index data on Friday. The report is expected to show a small decline in annual core inflation. Any divergence from analysts’ estimates could influence the Federal Reserve’s policy outlook and impact the US Dollar’s valuation.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.