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Gold Down Again on Ukraine Talks, Briefly Beneath $1,900 By Investing.com

by equitieswatch
March 29, 2022
in Commodities


© Reuters.

By Barani Krishnan

Investing.com — Gold bulls’ aims of staying above $1,900 an ounce — let alone returning to $2,000 highs — are being severely challenged as peace talks over Ukraine go through their twists and turns.

The most-active gold futures contract on New York’s Comex, , settled Tuesday’s trade down $27.60, or 1.4%, at $1,912.20 an ounce. With Monday’s drop added, the benchmark gold futures contract is already down 2% on the week.

But more damaging than that to the chart action of gold was the intraday decline to $1,888.40 — which marked its lowest since Feb. 24, the day that Russia invaded Ukraine and sent the yellow metal above $1,900 in the following days.

“Gold prices are easing again as risk appetite improves on reported progress in talks between Ukraine and Russia,” said Craig Erlam, analyst at online trading platform OANDA. “The yellow metal was in strong demand (when) Russian troops crossed the border and hope of a ceasefire is seeing that unwind.”

Erlam said while combined U.S. inflationary pressure and other political and financial risks keep gold supported, “we could see it ease a little further in the near term.”

“The next key (test) level for gold will be $1,900,” he added.

Inflation has been one of the biggest propelling factors for gold prices this year.

U.S. price pressures, as measured by the Consumer Price Index, or CPI, grew 7.0% in 2021, and 7.9% during the year to February — both at their fastest in four decades. The CPI’s expansion outpaces economic growth at 5.7% last year and projected by the Federal Reserve at 2.8% this year.

Even so, Tuesday’s tumble below $1,900 had negative repercussions for gold charts, said Sunil Kumar Dixit, chief technical strategist at skcharting.com.

Dixit, who models his projections based on the , said physical bullion’s surge last week to $1966 highs has been “miserably invalidated today as we saw intense selling that took us to $1,890, well under the March 16 trough of $1,894.”

While spot gold’s oversold intraday stochastic could aid in its recovery, “a return to $1,930-$1.940 areas can again attract sellers,” he said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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