Gold Price View: Prospects of US-Russia Meeting on Ukraine

Gold, XAU/USD, Russia, Ukraine,  Talking Points:

Gold prices ended at the highest level since June 2021 due to tensions in Ukraine
The US-Russia summit cooled XAU / USD growth in Asia next week
Data is missing at the weekend, and emerging gold short bets offer upward bias

Gold prices have risen over the past 24 hours as geopolitical tensions around Ukraine frighten traders. During Thursday’s Asia-Pacific trading session, unconfirmed reports intersected, claiming that Ukraine was dropping mortars and grenades at LPR sites. It stimulates risk aversion and contributes to the attractiveness of anti-yellow metal preservation.

During the Wall Street agreement, the United States warned of a possible Russian attack on Ukraine. Senior Russian officials complained that such an attack was not carried out or planned. These different answers mean growing uncertainty about the uncovered situation. Such conditions are likely to signal a bad mood in the market. While gold rose, the S&P 500 fell 2 percent on Thursday.

The XAU / USD was in a cautious decline during Friday’s APAC session. According to reports, the USA will host a meeting of Russian Foreign Minister Sergei Lavrov in Europe next week. If tensions do not increase in the meantime, gold may have trouble finding another upward momentum. At the same time, if improvements are possible, the potential for disadvantages may be reduced. The absence of significant risk in the economic event on the weekend could leave the XAU / USD in a consolidated state.

Gold Technical Analysis

Gold closed on Thursday at highest since June 2021, when prices stopped in front of the key resistance zone of 1898-1916. Yellow metal is currently experiencing its best month in almost a year. Direct support seems to be a former resistance zone from 1867-1879, with a 20-day simple moving average coming from below. The declaration of resistance was declared the highest for November 2020 (1949 – 1965).

XAU/USD Daily Chart

Gold Outlook: Prices Cool Amid Prospects of US-Russia Meeting on Ukraine Next Week

Chart Created Using TradingView

Gold Sentiment Analysis – Bullish

According to the IG Client Sentiment (IGCS), about 62% of retailers are not long gold. Given that the IGCS is likely to act as a contradictory figure and that most traders are biased upwards, this suggests that prices are still weak. However, the downward exposure increased by 21.32% and 43.32%, respectively, compared to yesterday and last week. In view of this, recent changes in positions suggest that gold may continue to grow.

Gold Outlook: Prices Cool Amid Prospects of US-Russia Meeting on Ukraine Next Week

*IGCS chart used from February 17th report

— Written by Daniel Dubrovsky, Strategist for DailyFX.com