Gold prices rose to an eight-month high as investors fled to the safe-haven metal amid economic growth concerns and escalating Russia-Ukraine tensions. Analysts are forecasting higher highs for gold, with $1,903-1,923 pointing to the critical resistance range. Market evaluations and price analyzes of master analysts cryptocoin.com compiled for our readers.
Phillip Streible: Gold currently wears many different hats
Phillip Streible, chief market strategist at Blue Line Futures, said in a statement:
There are many different angles to look at gold right now in terms of macro, geopolitical and inflation hedges. Bitcoin and stocks are being sold and people are looking for places to park their money. Gold currently wears many different hats.
A shower of data on Thursday morning gave investors pause as positive momentum in the US labor market slowed, the Philadelphia area’s manufacturing sector numbers were weaker than expected and housing data from the US was mixed. Phillip Streible explains the problems and the Fed’s stalemate as follows:
Economic data is slowing. Authorities are trying to turn it back as a major economy. But the reality is that the economy is slowing down while the Fed is extremely hawkish. This is the biggest problem. The economy will continue to slow down into the second quarter and Fed tightening will really hurt growth. Gold is a hedge against declining growth. The yield curve is flat and inverted if you look at it. This tends to lead to a recession or depression.
“Gold prices will fall if Ukraine tensions subside”
Adding to new recession fears, the geopolitical angle keeps gold in high demand. And the uncertainty of investors’ knowledge of what’s going on in Ukraine increases the sense of risk aversion in the market. Part of the movement is currently focused on geopolitical news. As a geopolitical risk, there is probably $25 added to the gold price right now. Phillip Streible says that if the Ukraine crisis eases, gold will fall:
If tensions ease, you will see the gold price drop.
Gold prices jumped to their highest level since mid-June on Thursday, climbing nearly $30 throughout the day to trade at $1,900. The US said war in Ukraine appeared imminent after reports of bombing on Ukraine’s front line. Evidence on the field suggests that Russia is moving towards an imminent invasion. “This is a very important moment,” said Linda Thomas-Greenfield, the US Ambassador to the United Nations.
US President Joe Biden has confirmed that there are every indication that Russia is planning to invade Ukraine, arguing that Moscow is conducting a fake operation to justify military action. “We have reason to believe they participated in a fake operation to find a pretext to enter,” Biden told reporters on Thursday. “Every sign we have shows that they are ready to enter and attack Ukraine,” he said.
Russia denies any plans to attack Ukraine and announced earlier this week that it was withdrawing some of its troops from the border. Washington noted, however, that there was no evidence of withdrawal.
$20 critical region for gold prices: $1,903-1,923
According to analysts, gold could rally to $1,923 before it encounters some major overhead resistance. Therefore, it will be an important level to watch as the precious metal continues to take another high. DailyFX strategist Michael Boutros points out the following levels:
The levels we should be looking for are $1,903 and $1,923, the highest weekly closes of last year. This $20 zone is critical. A technical break is needed above $1,923. If this is broken, a large threshold will open upwards.
Michael Boutros says the fundamentals of gold look pretty solid right now:
Inflation is warming, which means bullish for gold. You have expectations that interest rates will skyrocket. Worsening geopolitical events are fueling the fire. The situation in Ukraine is turning into predictable violence. These are scary markets. Gold is feeling the technical breakthrough.
OANDA senior market analyst Craig Erlam states that he would like to test $1,900 if gold rallies in Ukraine:
In the latest move, gold prices hit their highest level since mid-June. There still seems to be momentum in this movement. So we can see $1,900 tested. This is the next big test for the yellow metal, and a big climb in Ukraine could be the catalyst for such a move.
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