- The easing of tensions favors a better market mood, although the gold price rises anyway.
- Wall Street is posting substantial gains after the open, paring Monday’s losses.
- XAUUSD is technically bullish and is trading near its all-time high of $2,075.64/troy ounce.
the price of gold consolidates around the $2,060 level as US President Joe Biden and UK Prime Minister Boris Johnson have announced new sanctions against Russia amid its latest invasion of Ukraine. They first announced that they would ban all crude oil imports from Moscow, including gas and energy, “after consultation with allies.” Market participants have already anticipated this move as it has been doing the rounds since Monday. Spot gold broke higher and hit a new multi-month high of $2,063.53 a troy ounce earlier in the US session. Commodity prices resumed gains after Wall Street opened lower, adding to Monday’s losses.
As for the UK government, it announced that it would phase out the import of Russian oil and oil products by the end of 2022. The idea is to make a transition to provide enough time for markets and companies to replace Russian imports. In addition, they noted that the current dependence on Russian natural gas represents 4% of the supply and that they are already looking for alternatives, adding that the country will work with other import partners to secure more supplies.
The price of gold is currently trading around $2,060 a troy ounce, overbought but with no signs of technical exhaustion. The next relevant level to watch is $2,075.64, where it set a record in August 2020, while beyond the level, market players will look for a test of 2,100. As the shiny metal continues to push intraday highs, new record highs are likely to be hit in the near term. Meanwhile, government bond yields have risen around the world, reflecting an improving market mood. The yield on the 10-year US Treasury bond has risen ten basis points to hover around 1.85%. However, the sentiment could worsen at any time amid the ongoing crisis between Russia and Ukraine.
Demand for the US currency partially eased as concerns about events in Eastern Europe cooled somewhat. Asian stocks were lower, although their European counterparts traded in the green, leading a comeback among US indices before the open and limiting demand for the dollar to the benefit of the shiny metal. The third round of peace talks that took place on Monday ended without material solutions, but Gold Price investors are now looking for new news, mainly another round of talks next Tuesday in Turkey.
Gold Price Technical Outlook
XAUUSD pulled back from the mentioned high but found buyers at $1,999.35, a sign that buyers are willing to defend the $2,000 mark. The price of gold is overbought in the short term, although there are no technical signs of bullish exhaustion, which keeps the risk skewed to the upside for the American session. Beyond the daily high, the next resistance level is the all-time high set in August 2020 at $2,075.64 a troy ounce.
Measuring the January/March rally from $1,780.15 to $2,020.96, the 38.2% retracement comes in at $1,928.31, meaning a drop to that level could be considered corrective. In the short term, once below the aforementioned $1,999.35, XAUUSD could drop to $1,964, the 23.6% retracement of the aforementioned run.
Additional technical levels
Source: Fx Street
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