- The bearish market mood increased demand for the yellow metal.
- Vladimir Putin retaliates for Western sanctions, putting the Russian military on high nuclear alert.
- XAU/USD Price Forecast: Has a Bullish Bias but Subject to Market Sentiment.
Gold (XAU/USD) reached a daily high during the Asian session at the beginning of the week. The financial market mood worsened over the weekend as the Eurozone, US, UK, Canada, among other countries, imposed strict sanctions on Ukraine. Russia’s response was swift when President Putin put his military on high nuclear alert. Those factors caused a gap on Monday when markets opened at $1,919.15. At the time of writing, XAU/USD is trading at $1,903.
The sanctions included the removal of several Russian banks from the major financial system SWIFT. In addition, the US imposed sanctions on Russia’s top 10 financial institutions while freezing the assets of the Russian president and Russian ministers. Furthermore, a dozen Russian oligarchs with links to Putin witnessed the same thing along with a travel ban.
Meanwhile, US Treasury yields continue to fall, indicating that appetite for US Treasuries has increased. By contrast, the US Dollar Index, a gauge of the value of the dollar against a basket of six rivals is up 0.19% to $96.81.
The US economic calendar presented the trade balance for goods in January, which recorded a deficit of 107.63 billion dollars compared to the 100.47 billion dollars estimated. At the same time, the Chicago and Dallas Fed manufacturing indices for February came in better than expected at 56.3 and 14, respectively.
XAU/USD Price Forecast
Gold (XAU/USD) gapped and posted a daily high of $1,919.15, but pulled back to Monday’s daily pivot point around $1,897.21 due to a change in market sentiment. At the end of the session, XAU/USD is approaching $1,900 as the market mood remains unchanged.
Indicators such as the daily moving averages (DMAs) are below the price of the pair, which suggests that gold has a bullish bias. The Relative Strength Index (RSI) is at 63, aiming higher, after falling to 60.70 on Feb 25, confirming the above, and with enough room to breakout, before reaching overbought conditions.
That said, the first resistance for XAU/USD would be the June 21, 2021 high at $1,916.61, followed by the Feb 28 daily high of $1,927.48 and then the yearly high of $1,974.48.
Additional technical levels
Source: Fx Street
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