- Gold price gets a fresh lift from the sudden risk-off move, despite the USD bid.
- Ukraine’s armed forces reported firing grenades and mortars at four LPR localities.
- Less hawkish Fed minutes add to the upside in gold while geopolitical tensions underpin.
Gold price is seeing a buying resurgence and looks to challenge the three-month highs of $1,880 once again, as a fresh wave of risk-aversion hit markets on the Ukrainian firing reports.
The Russian media agency, Sputnik, reported that the Ukrainian military forces shot mortars and grenades in four Luhansk People's Republic (LPR) localities.
The LPR is located in Luhansk Oblast in the Donbas region, which is internationally recognized to be a part of Ukraine but run by Russian-backed separatists.
On the above headlines, gold price jumped from daily lows of $1,868 to reach highs at $1,876 before retracing slightly to $1,875, where it now wavers.
Markets continue pricing in a war situation sooner (than later), as the US refuses to believe Russia’s claim of troops’ withdrawal while adding that Moscow has added 7000 troops along the Ukrainian border.
To add, the latest reports will only firm up their belief, keeping the risk-off trades intact while pinning gold towards $1,900.
Further, less hawkish-than-expected January Fed meeting’s minutes added to the bullish sentiment around gold price. The FOMC minutes disappointed the hawks by not offering any hints on aggressive and faster Fed’s tightening this year, in the face of soaring inflation.
Looking ahead, the risk flows will continue to dominate amid renewed Russia-Ukraine tensions, although gold bulls could face an uphill battle as the US dollar finds safe-haven bids as well.
Gold Price Chart: Four-hour
Technically, gold price needs a sustained break above the horizontal trendline resistance at $1,880 to seek the much-needed boost towards $1,900.
The Relative Strength Index (RSI) is seeing a fresh downtick, capping the upside in gold for now.
But the leading indicator holds above the midline, keeping buyers hopeful.
Further retracement could retest the daily lows, below which the bullish 21-Simple Moving Average (SMA) at $1,864.
Gold Price additional levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD recovers from two-year lows, stays below 1.0450
EUR/USD recovers modestly and trades above 1.0400 after setting a two-year low below 1.0350 following the disappointing PMI data from Germany and the Eurozone on Friday. Market focus shifts to November PMI data releases from the US.
GBP/USD falls to six-month lows below 1.2550, eyes on US PMI
GBP/USD extends its losses for the third successive session and trades at a fresh fix-month low below 1.2550 on Friday. Disappointing PMI data from the UK weigh on Pound Sterling as investors await US PMI data releases.
Gold price refreshes two-week high, looks to build on momentum beyond $2,700 mark
Gold price hits a fresh two-week top during the first half of the European session on Friday, with bulls now looking to build on the momentum further beyond the $2,700 mark. This marks the fifth successive day of a positive move and is fueled by the global flight to safety amid persistent geopolitical tensions stemming from the intensifying Russia-Ukraine war.
S&P Global PMIs set to signal US economy continued to expand in November
The S&P Global preliminary PMIs for November are likely to show little variation from the October final readings. Markets are undecided on whether the Federal Reserve will lower the policy rate again in December.
A new horizon: The economic outlook in a new leadership and policy era
The economic aftershocks of the COVID pandemic, which have dominated the economic landscape over the past few years, are steadily dissipating. These pandemic-induced economic effects are set to be largely supplanted by economic policy changes that are on the horizon in the United States.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.