Jump to content

Gold Price (XAU/USD) Rallies as Russia-Ukraine Tensions Increase


MongiIG

Recommended Posts

Gold Price (XAU/USD), Chart, and Analysis

  • Safe haven flows override concerns of higher rates.
  • A sharp increase in retail net-shorts over the week.
Gold Price (XAU/USD) Rallies as Russia-Ukraine Tensions Increase

Fears that Russia could invade Ukraine imminently have driven safe-haven flows into gold, pushing the price of the precious metal back to levels last seen in late November. Friday’s $40 rally saw gold hit $1,865/oz. before edging marginally lower as UK intelligence warned that Russia could invade Ukraine ‘at any time’, while US President Joe Biden warned Russia that the US would react swiftly if Russia entered Ukraine. As conditions worsen, gold continues to pick up a strong risk-off bid and this is likely to remain the case for the foreseeable future.

Gold traders should also be aware that there are a number of Fed members speaking this week, including St. Louis Fed President James Bullard who speaks today at 13:30 GMT. Bullard’s hawkish turn last week, suggesting 100 basis points of rate hikes before July 1, sent short-end US government bond yields spiraling higher with the rates market now looking at seven standard 0.25% rate increases this year. There is also increasing talk of a 50 basis point hike at the March FOMC meeting and, to a lesser degree, a special inter meeting hike before then. Normally the higher inflation/higher rates environment would weigh heavily on gold but the political background is currently holding sway.

For all market-moving data releases and events, check out the DailyFX Calendar

With gold back above the prior resistance area of $1,830/$1,837/oz. the next target in sight is the November 16 high at $1,877/oz. The series of higher lows from early August remain in place and underpin the move higher, while all three simple moving averages remain supportive.

GOLD DAILY PRICE CHART – FEBRUARY 14, 2022

Gold Price (XAU/USD) Rallies as Russia-Ukraine Tensions Increase

 

Retail trader data show 67.51% of traders are net-long with the ratio of traders long to short at 2.08 to 1. The number of traders net-long is 5.51% higher than yesterday and 18.27% lower from last week, while the number of traders net-short is 5.67% higher than yesterday and 67.85% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Gold prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current Gold price trend may soon reverse higher despite the fact traders remain net-long.

 

What is your view on Gold – bullish or bearish?

 

Feb 14, 2022 |  Nick Cawley, Strategist. DailyFX

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • image.png

  • Posts

    • The integration of AI into metaverse can be seen as a transformative shift. While companies leverage on AI to streamline creation process and enhance user experience, the integration of AI within the metaverse facilitates smooth interactions, providing users with instant information. In ROGin AI is a platform that combines the strengths of both technologies to offer wide financial services, ranging from cryptocurrency investment to NFT trading; an earning service that gives users access to simplified asset management, and a social trading platform that enhances users investment choices.  Its ecosystem boasts of vast features that have been integrated to enhance user experience, including features like Web3 wallet, reward system, governance etc. ROGin AI tokenomics, another core part of its ecosystem drives it growth, having burned 1.8bn out of 2bn tokens initial issuance, shrinking the total number of tokens issued to 200m. With ROG now about to list on Bitget on 19th June 2024, a high demand and potential surge could be in the offing.
    • Frankly, it's a relief to know that Nvidia is more valuable than the entire German stock exchange. Yes, there is room for it to grow and it's banking on automation to help it do so, but is it really worth all of German equities? Probably not. It's a company that manufactures chips, like Intel or AMD or Huawei or Qualcomm. It's a 2024 version of Cisco systems. The price is, like most on the Nasdaq, speculative. It's trading at a p/e of 62. Sixty two.  AI has been a real boon to the NASDAQ, though actually in real world use cases it's been a bit less than impressive. From personal experience anyway. More hype than substance. Chat GPT being especially disappointing and is getting dumber the longer it is being gatekept and limited. However, having lived through the original dot com bubble, nothing should surprise where imaginative valuations are concerned. This time appears similar. A seeming relentless unstoppable race into price discovery. World use cases that seem to negate the need for people to do any work (so who's going to pay for whatever services are being offered?)       Sure AI has and indeed will be integral to our future. But we could be hyper-focusing ourselves into a compromising dilemma on the use case for actual humans, for example. Is Apple worth the 2 trillion bucks the stock price says it is, now it is using ChatGPT AI in it's new devices? Again I return to my use case examples with Chat GPT where it regularly tells me it can't help. Ok, I can have existential debates with Claude from Anthropic about the evolution of AI. But can it help with strategy trading Gold, for example? There it becomes resolutely mute. Can it or will it create software (EA's) for MT4/5 platforms based on predetermined strategy or confluence of strategies? Or integrate strategy for the purpose of gaming out possibilities? That would be a Nope.  Negatory. No can do. Long way to go then. Long way. The prices however, would indicate all of this and virtual paradise are just around the next corner. Unless, aggressive war/defence AI decides in a pique of frustration that human beings are beastly and not worthy of being it's master and the best thing for all concerned is to send them back to the stone age. There are doubtless many religious enthusiastic fantasists who would welcome such eventualities, but they are in the minority of Tiny.  In brief, the Nasdaq looks set to break the $20k barrier and will likely continue headlong into the next market capitulation, whenever that will be. There is intermarket bearish divergence with the Dow and Nasdaq, though the S&P500 is close to new ATH's like the QQQ. There has been no correction since 2022 of any real note.  If you have been riding the Nvidia wave then well done, just remember to book profits. The Fed is still giving decent, once in a generation returns on risk averse investment as insurance.     
×
×
  • Create New...
us