XAU/USD Sets New 19-Month Highs, As Markets Monitor the Situation in Ukraine



Gold is a traditional safe-have that has found buying interest from the risk-aversion that stems out of the Russia-Ukraine military conflict. Apart from the geopolitical risk itself, the fear of economic fallout and higher energy prices has created worries of stagflation and may complicate the job of major central banks, which are trying to tighten their monetary policies In the face of surging inflation.

These concerns are further aggravated by talks for a ban on energy imports from Russia, to which Europe and Germany are highly dependent. US Secretary Blinken notet that "We are now in very active discussions with our European partners about banning the import of Russian oil to our countries", speaking on CNN over the weekend. [1]

German Chancellor Olaf Scholz is still resistant on oil and gas sanctions, based on a statement reported by Politico yesterday, as it is hard to secure supply in any other way at this point. [2]

XAU/USD has entered its second straight profitable month and after having concluded its best week in nearly two years, today its sets fresh 19-month highs, above the 2K mark.

This puts 2,050 in its eyesight, with the all-time highs from August 2020 located at 2,075. Having defended multiple times during the ensuing drop, the 38.2% Fibonacci level of the 2015-2020 advance, as shown on the Daily chart, it has the ability to set new record highs. However, we are a bit cautious for now, as fresh a pullback and/or fresh catalyst may be required.

From a technical prospective, the Relative Strength Index remains near overbought levels and the precious metal trades off its best level during the European session. This may create pressure back towards 1,960-1,959, but sustained improvement in sentiment will be needed, for a deeper that will threaten 1,916.

Nikos Tzabouras

Senior Market Specialist

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.



Retrieved 08 Mar 2022 https://www.state.gov/secretary-antony-j-blinken-on-nbc-meet-the-press-with-chuck-todd/


Retrieved 30 Jun 2022 https://www.politico.eu/article/germany-rejects-calls-for-banning-russian-oil-and-gas/


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