Gold Price Forecast: XAU/USD hits $1,950 on Russia-Ukraine war, what’s next?

• Gold price rockets to $1,950 after Russia officially invades Ukraine.
• Risk-sentiment collapses as markets await severe responses from the West.
• Gold bulls to defy overbought conditions as $2000 remains in sight.

Gold price is rejoicing at the highest level in over a year, having tested the $1,950 key level, in a blistering rally that showcased a rise of about $40 in a few hours. Gold’s outperformance as a safe-haven asset comes after Russia enters into a war with Ukraine after its military attacked Donbas, eventually crossing into Kiev. Russian President Vladimir Putin’s announcement that he has authorized special military operations was the tipping point, which triggered the fresh uptrend in the bright metal.

The risk-sensitive assets took a big hit, as a flight to safety ramped up and investors scurried to the ultimate safe haven in gold. Meanwhile, US Treasuries and the dollar also attracted safe-haven bids, although gold price emerged as a clear winner. The risk barometer, the S&P 500 futures tumbled near 2.50% at one point, now losing 1.95%, with the demand for higher-yielding assets absolutely absent.

Markets keep a close eye on the further developments around the Russia-Ukraine conflict, especially after the Ukrainian authorities confirmed the border of Ukraine was attacked by Russian troops from Russia and Belarus. Moreover, US President Joe Biden’s promise for ‘further consequence on Russia’ and the Western response will be closely followed for fresh trading opportunities in gold price.  Heading into the G7 meeting, President Biden said “the United States and our Allies and partners will be imposing severe sanctions on Russia.”

Gold Price Chart - Technical outlook

Gold: Four-hour chart

Gold’s four-hour chart shows that bulls have taken a breather after the relentless rise, although the underlying bullish sentiment remains intact.

The pullback in gold price could be attributed to the overbought conditions on the said time frame, as the Relative Strength Index (RSI) marches higher above 70.00.

Further, the pace of the rally suggests that a minor correction could be in the offing, as investors look to take profits off the table following a rejection at $1,950.

Note that the impressive surge in gold price coincides with a descending triangle breakout, especially after bulls sustained a break above the falling trendline resistance at $1,908 on a four-hourly candlestick closing basis.

The metal hit the triangle target at $1,935 and rallied further amid intensive buying pressure.

If the corrective downside picks up pace, then gold price could look to test the triangle resistance now support at $1,907.

Ahead of that level, the $1,930 and $1,920 round numbers will help limit the pullback.

However, buying resurgence could see a retest of the 13-month highs of $1,949, above which doors will open up towards the $2,000 level.