Jump to content

Gold Price Forecast: XAU May Target 1900 as Bulls Advance on Russia Threat


MongiIG

Recommended Posts

GOLD, XAU, RUSSIA, UKRAINE, OIL, BREAKEVEN RATES, RATE HIKE BETS – TALKING POINTS

  • Gold prices continue to advance as traders await Russia’s next move on Ukraine
  • Short-term inflation expectations surge as WTI crude surpasses $95 per barrel
  • Bullion traders eye Russia’s next move, US retail sales and the FOMC minutes
Gold Price Forecast: XAU May Target 1900 as Bulls Advance on Russia Threat

Gold prices moved higher overnight, underpinned by fears over a Russian attack on Ukraine, adding onto last week’s impressive gain of just under 3% - the yellow metal’s best performance since May 2021. US officials warned that Putin’s forces could launch an invasion as soon as Wednesday, citing mostly unspecified intelligence. US satellite images are reported to show military units moving from assembly areas into “attack positions.” Meanwhile, diplomatic efforts to avoid a conflict remain underway.

German Chancellor Olaf Scholz is set to speak with Russian President Vladimir Putin after visiting Ukraine on Monday. Germany has been criticized for taking too soft of a stance in recent weeks, with some speculating that the soft stance is because of the country’s heavy reliance on Russian natural gas. Energy prices have shifted higher due to geopolitical strife.

Those higher energy prices have sent near-term inflation expectations soaring despite traders increasing their bets on Federal Reserve rate hikes. Crude oil prices rose above $95 per barrel earlier this week as fears over western sanctions removing Russia’s nearly 10 million barrels per day of oil out of the global market increases. The 1-year breakeven rate has quickly advanced higher over the last week, along with the 5-year breakeven rate to a lesser extent, helping bolster bullion’s inflation-hedging appeal.

The conflict in Ukraine is also stoking a surge in volatility across equity markets, bolstering gold’s case as a store of value. The S&P 500 VIX “fear gauge” rose 3.58% in New York on Monday. Stock indexes across the Asia-Pacific region are mostly lower in Tuesday trading, with South Korea’s KOSPI down around 1% through mid-day trading. Gold typically performs well as a volatility hedge, and given that a conflict in Eastern Europe would do little to derail Fed rate hikes, Treasuries offer little attraction. That said, the fundamental backdrop for Gold looks rosy at the current calculus. A major de-escalation in rhetoric would likely threaten the yellow metal.

gold, breakeven rates, inflation expectations, russia, xau, bullion, gld

GOLD TECHNICAL FORECAST

XAU/USD is attempting to clear the November high of 1877.15 as bulls pile on the buy button. The move follows a break above trendline resistance stemming from the September 2020 swing high. The Relative Strength Index (RSI) entered ‘overbought’ conditions on the move, rising above the 70 level. The MACD oscillator is also pulling higher from the center line, reflecting the bullish momentum in prices.

A clean break above 1877.15 would bring the 1900 psychological level into focus. Next up, if bulls succeed, is the June 2021 high at 1916.53. Alternatively, failing to hold prices above the November high may see prices pull back, perhaps to the January high at 1853.83. A deeper retracement would put former trendline resistance on the cards.

XAU/USD DAILY CHART

gold technical chart, gld technical chart, xau chart

Chart created with TradingView

 

--- Written by Thomas Westwater, Analyst for DailyFX.com. 15th Feb 2022

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

    • Hi    when I try to buy the tickers SDIV and KBWD the platform does not allow me. This is strange as I have a broker account in France where I can easily buy these products. the MIFID retail legislation is related to CFD and margin, hence the reason must be different, can anybody help me?   Thanks
    • BOOM UP is the ultimate Game-Fi experience on Telegram, offering gamers a chance to earn real profits while immersing themselves in thrilling gameplay, unique art, and social interactions. Say goodbye to time-consuming games and hello to a world where fun meets profitability! By blending traditional gaming with the power of blockchain, BOOM UP is revolutionizing the industry and bridging the gap between Web2 and Web3. Get ready to dive into the future of gaming and experience a whole new level of excitement and rewards! Exciting news – BOOM UP is about to launch on Bitget, taking the crypto world by storm. Don't miss out on the chance to be a part of this groundbreaking project that's set to redefine the gaming and finance landscape. Get ready to level up with BOOM UP on on this exchange and unlock endless possibilities in the world of Game-Fi and NFTs!
    • As crypto adoption explodes in the EU, Bitget is fueling the flames with Builders Meetups – engaging events designed for both crypto veterans and newbies. Imagine learning from the Bitget EU COO Apprentice and crypto bigwigs, then building your network with fellow enthusiasts (potential friends or collaborators!). Plus, expert talks will boost your crypto IQ and there might even be free swag! Bitget goes beyond exchange, fostering the community through educational resources on Bitget Academy and a user-friendly platform that welcomes newcomers to the exciting world of crypto. The "Meet Bitget: Your Gateway to Crypto Trading" event in Bucharest, Romania on July 18th is your chance to dive in – registration is free! Don't miss out and spread the word.
×
×
  • Create New...
us