- Gold starts March with slight losses after the biggest monthly jump since May.
- Markets expect a key trigger in the Ukraine-Russia standoff after peace talks ended inconclusive.
- Yields favor the USD, but Biden, Powell’s testimony and the US NFP will be crucial catalysts.
The price of gold (XAU/USD) is rising above $1,900 once again, having found strong buyers earlier in the Asian session. A sense of calm prevails on the Russia-Ukraine conflict front, forcing US dollar bulls to relinquish control as they push the price of the yellow metal higher. Whether gold sustains the renewed rise remains to be seen, though, as US Treasury yields remain firmer across the curve amid a possible 25 basis point rate hike from the Fed in March. Markets are also looking forward to the US ISM Manufacturing PMI to be released later on Tuesday, while developments around the Ukraine crisis are likely to remain the main driver of the market. The focus also remains on US President Joe Biden’s State of the Union address due to be released early on Wednesday.
Technical analysis
Having started the week on a positive note, gold prices continue to move little around the June 2021 peak.
However, the bullish divergence on the RSI, seen as higher lows of gold prices accompanying higher lows of the RSI line. Also on the upside is the retracement bearish bias of the MACD line.
That said, the precious metal is currently on track for a 23.6% Fibonacci retracement of the late January-February high near $1,930. However, gold buyers may struggle to break above $1,930, but can push prices to the February high around $1,975 after a successful breakout.
In a case where gold buyers manage to maintain control beyond $1,975, the 61.8% Fibonacci extension around $1,997, as well as the psychological $2,000 level, will be tough bones for bulls to crack. XAU/USD.
Conversely, pullbacks will remain elusive until the convergence support at $1,869, which comprises the 100 SMA and an uptrend line from Jan 28, is broken.
It is worth noting that gold’s weakness below $1,869 will target the mid-February low near $1,845 before targeting the $1,800 level.
Gold 4 hour chart
Gold additional levels
Source: Fx Street
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