Growing concerns about the Russian invasion of Ukraine are keeping investors cautious. Global stock transactions are mixed, but government bond yields are rising. Gold prices are neutral, but technical signs point to another decline, according to Fxstreet analysts. Analysts’ market comments and technical analysis in their own words cryptocoin.com We have prepared for our readers.
“Sensitivity-related operations appear to be temporarily paused”
Gold prices maintain modest intraday gains with a soft start to the week. The old news has no qualms for gold and financial markets are mixed due to the absence of a new catalyst. The US dollar is trading softly on the FX board, helping the shiny metal stay afloat as US indices manage to bounce off their initial lows. The S&P 500 and Nasdaq Composite remained roughly the same from Friday’s closing levels, while the DJIA was the worst performer, down 153 points, or 0.44%.
The weak performance of equities is directly related to the ongoing situation in Eastern Europe. Russia continues to bomb Ukraine and approaches Kiev. Hopes for a diplomatic solution dimmed after the Kremlin said the presidents of the two nations expected much more progress in negotiations before meeting face-to-face. Meanwhile, Europe’s dependence on Russian oil and gas has become a major headache for Union leaders as global sanctions rise. Still, sentiment trades seem to have paused temporarily before further developments, to the detriment of the gold price.
Overall, Asian and European indices were mixed, but yields on government bonds rose and the US 10-year Treasury yield rose to 2.24% on concerns that inflation will continue to rise regardless of central banks’ measures. Oil prices continued to rise after Russian Deputy Prime Minister Novak said that crude oil price could rise to $300 per barrel if Russian oil was avoided. However, this is highly unlikely.
Gold prices technical view
Gold is accelerating north above a critical Fibonacci level around $1,925, the 50% retracement of this year’s rally, ignoring the short-term downside tone. However, gold prices continue to trade below the stable 20 DMA, while daily momentum maintains the bearish trend at negative levels. On the other hand, the RSI indicator turned flat around the middle line, indicating diminishing selling interest. But it failed to foresee more sustainable progress in the near term.
It is noteworthy that the gold price bottomed out at $1,895 last week and fell just before the 61.8% retracement of the mentioned rally at $1,890.60, a critical support level. On the other hand, the 38.2% pullback comes in around $1,960 where selling interest is proving strong. For the shiny metal to truly rise, it will need to clear the latter.
Techniques point to a decline, while fundamentals point to an improvement. The aforementioned Fibonacci levels are critical as gold can find its way into a clear break of any of these.
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