Geopolitical uncertainty support short-term upswing in gold price. Nonetheless, the gold market rally is expected to reverse, in the view of economists at Citibank.Geopolitical tensions and elevated volatility to support gold in the short-term
“We upgraded the 0-3m gold point-price target $125/oz to $1,950/oz but remain bearish spot/forwards with a 6-12m downside target of $1,750.”
“Even though gold trading tends to weaken into Fed lift-off, we think geopolitical tensions and elevated asset market volatility can support the yellow metal in the short-term.”“Over the medium-term, higher real yields and stronger equities can weigh on bullion prices again, while risk premiums should erode. But robust physical demand in Asia and recession tail hedges might mute the extent of price downside in 2022.”
“If bullion markets stay strong into April, it might point to a new bullish price cycle, and it would need to re-think our gold/rates thesis.”
EUR/USD holds its ground near 1.0900 in choppy day.EUR/USD continues to fluctuate near 1.0900 on Tuesday as investors wait for US President Biden to announce new measures against Russia. The data from the euro area showed that the economy expanded by 0.3% in the fourth quarter as expected and Wall Street’s main indexes are posting modest gains after the opening bell.
EUR/USD News .Gold extends rally to highest level since August 2008 above $2,030.Gold fell toward $2,000 in the early European morning on Tuesday but regained its traction. When American investors entered the market, XAU/USD stretched higher and touched its strongest level since August 2018 above $2,030 despite rising US T-bond yields.
Gold News
GBP/USD continues to fluctuate in daily range near 1.3100.GBP/USD staged a rebound toward mid-1.3100s during the European trading hours but reversed its direction heading into the American session. Despite the cautious market mood, the pair stays relatively resilient near 1.3100 as investors wait for the US and the UK to announce decisions on Russian oil imports.
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