Indecision over Russian invasion in Ukraine is joined by technical resistance. Fed will take immediate action to limit Russian moves.
The US rejects the Blinken-Lavrov summit, Biden-Putin summit because Moscow is being sanctioned by the West.
Gold Price Forecast: Ukraine is in the eye of the storm. Fears boost safe-haven assets
Spot gold (XAU/USD), which is currently offered at $1,900, was mildly traded during Wednesday’s Asian session. This follows the U-turn of the highest levels since June 2021.
Recent inaction by the yellow metal could be due to the lack of Japanese traders. This indirectly affects US bond demands in Asia and limits catalysts for gold. Mixed concerns about the Fed’s performance in the future and a cautious mood regarding Russia-Ukraine relations as the West sanctions Moscow are two other factors that have been testing gold traders.
The market’s risk appetite and favor gold buyers were hit hard by the US’s decision to exclude the possibility of a summit between Joe Biden, the US President, and Vladimir Putin, the Russian counterpart. The US Secretary of State Antony Blinken also rejected the necessity of Thursday’s meeting between Sergei Lavrov, the Russian Foreign Minister.
Biden’s statements like “We don’t intend to fight Russia” seem to have been a way of disarming the fears of war between the West & Moscow.
Elsewhere Dr. Raphael W. Bostic is Chief Executive Officer of Federal Reserve Bank of Atlanta. He stated that Fed is going to “let data guide us” in future decisions. This was in line with Michelle Bowman’s Monday statements. She said, “It’s too early to tell if Fed should hike 25bps or 50bps in March.”
S&P 500 Futures continue to lose ground with 0.5% intraday gains, while US Treasury yields remain inactive at 1.94%. They rose around 2.0% in the previous day.
While Fedspeak and geopolitical will continue to be the drivers, slow markets could allow gold to lose some of its gains.
Analyse technique
To trigger gold’s pullback after a multi-day high, the RSI overbought joined a resistance line of 17 months to trigger Tuesday’s pullback.
The metal is still above the November 2021 peak and backed by a support line 13 days old near $1,877. This keeps gold buyers optimistic about overcoming the immediate hurdle of $1,910. The upside filter that November 2021’s top around $1,917 is also acting is the one above.
Gold: Daily chart
A convergence of the resistance line from January 20 and the trend line from February 11 creates $1,890 as immediate support.
The 50-DMA and three-week-long rising trend lines, respectively at $1,872 or $1,857 will attract gold sellers, before confirming their dominance.
