- Gold price has given an upside break of $1821.25-1,831.87 as G7 bans Russian gold exports.
- Gold exports are the second largest revenue generation source for Russia.
- Lower expectations from the US economic data have weakened the DXY.
Gold price (XAU/USD) has climbed above $1,836.00 after overstepping Friday’s high at $1,831.87. The announcement of a prohibition on gold imports from Russia has infused fresh blood into the gold bulls. Earlier, the precious metal remained in a narrow range of $1821.25-1,831.87. Now, an upside break in the counter has brought a volatility expansion.
The prohibition of gold imports from Russia as it invaded Ukraine is going to hurt its financials for a prolonged period. After the ban on imports, Russia’s second most income-generating source has been targeted by the G7 countries, the business that fetches tens of billions of dollars for Russia. A prohibition on gold imports from Russia will squeeze the supply of gold in the global market.
Apart from that, a mild correction in the US dollar index (DXY) has also supported the gold prices. The DXY is underperforming as investors are bracing for underperformance from the US economic data. As per the market consensus, the US Durable Goods Orders are expected to land at 0.1% from the former release of 0.5%.
Gold technical analysis
A symmetrical triangle formation on the hourly is indicating a volatility contraction on a broader note. The upward sloping trendline is placed from June 14 low at $1,805.11 while the downward sloping trendline is plotted from June 16 high at $1,857.88. A firmer move above the 50-period Exponential Moving Average (EMA) at $1,829.30 has underpinned the gold bulls for supportive action. The Relative Strength Index (RSI) (14) has shifted into a 40.00-60.00, which bolsters a rangebound move ahead.
Gold hourly chart
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