While the US has imposed sanctions on Russia’s oil production, President Joe Biden has acknowledged that some European countries will not do the same. The gold market also does not see any new momentum after the climb in the USA. The market has already largely priced in the disclosure. Spot gold prices fell 1.90% to $2,009 at the time of writing on Wednesday, after hitting new record highs of $2,074.6 on Tuesday.
Analysts expect the yellow metal to hold up well
cryptocoin.com As we reported, while the United States imposes sanctions on Russia’s oil production, Biden has acknowledged that some European countries will not do the same. But he added that the United States and its allies are trying to develop long-term strategies to reduce Europe’s dependence on Russian energy.
Analysts expect gold prices to stay in good shape as the war in Eastern Europe creates more chaos in financial markets. The escalation in the US will likely increase inflation pressures and push the already record-high gasoline prices even higher.
Joe Biden warned American consumers that stopping Russia’s war in Ukraine would come at a cost. He noted that since the invasion of Russia, gasoline prices in the United States have increased by 75 cents. “With this action, gas prices will go even higher,” Biden said.
“The golden bulls have an ace to work in their favor”
Comex gold broke an all-time high Tuesday morning at $2,074.60 on a near-term basis. The previous record was broken at $2,063.00 in June 2020. According to senior market analyst Jim Wyckoff, with the yellow metal reaching new highs, traders can expect larger daily price movements in the near term. The analyst states that gold traders will continue to react to the latest news about the Russia-Ukraine war.
However, any easing of tensions in the conflict would likely bring gold prices down sharply, according to the analyst. On the other hand, the analyst reminds that even if the Russia-Ukraine situation stabilizes (which seems very far at the moment), the precious metals market bulls have an ace to work in their favor and this is inflation concerns. The analyst estimates:
Rising and even troubling global inflation is likely to continue to drive investor demand for fixed assets such as metals in the coming months.
Pablo Piovano: Gold still targets $2,075
Given CME Group’s advanced figures for gold futures markets, shorts reversed three consecutive days’ gains and contracts fell nearly 5.1k on Tuesday. Instead, volume rose for the third consecutive session, this time around 71.2k contracts.
Gold prices rose to new YTD from $2,070 on Tuesday. The increase was accompanied by declining open interest, according to market analyst Pablo Piovano; this is an indication that the acute escalation that has been in place since the start of the Russian invasion of Ukraine may face some headwinds in the very near term. Meanwhile, the analyst states that traders continue to aim for $2,075, the all-time high recorded in early August 2020.
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