Gold is consolidating around $1,910, retreating from fresh eight-month highs of $1,914. Bulls take a breather despite the risk-off sentiment at full steam, as investors digest the latest takeaways from the UN Security Council emergency meeting on Russia’s move.
The XAU/USD pair trimmed early gains and trades at around $1,896 a troy ounce, still struggling to take over the 1,900 threshold. The daily chart shows that the bright metal posted a higher high and a higher low for a third consecutive day, keeping the risk skewed to the upside. In the mentioned time frame, technical indicators consolidate within overbought readings as the 20 SMA advances above the longer ones.
In the near term, and according to the 4-hour chart, the bright metal has room to extend its gains. A bullish 20 SMA is leading the way higher, heading higher and providing intraday support. The longer moving averages have also turned higher below the shorter one, while technical indicators have retreated within positive levels, reflecting the lack of bullish strength rather than signaling an upcoming decline. The next relevant resistance level is 1,916.50, June 2021 monthly high.
Support levels: 1,887.60 1,877.20 1,865.10
Resistance levels: 1,916.50 1,923.70 1,934.70
Fundamental Overview
Gold surged to $1,908.23 a troy ounce, its highest since early in June 2021 as financial markets kick-started the week in risk-off mode. Escalating geopolitical tensions on the border between Ukraine and Russia are behind the dismal mood, as a war in Europe seems imminent. Russian President Vladimir Putin has recently said that he would decide on independence for rebel-held areas in eastern Ukraine later today, while Ukrainian President Zelenskiy has requested an urgent meeting of the UN Security Council.
The market’s sentiment remained sour through the Asian and European sessions, with local share markets plummeting in the red and the dollar gaining some bullish traction. A holiday in the US amid the celebration of Presidents Day has resulted in easing the dollar’s demand.